- The Indian equity markets rose, despite a jump in food inflation above 14%, as most Asian markets were also up. - Food inflation in India rose again after declining for several weeks, contradicting government and central bank expectations of moderating inflation. - Key inflation levels like food, primary articles, and fuel & power all increased during the week. The BSE Sensex closed up 133 points while the Nifty ended 31 points higher.

1. Market Wrap Up
Dec 30, 2010
The local equity markets traded in the northward direction, overlooking the jump in food inflation above 14% for the week ended December
18. While rest of the Asian markets settled mostly in the green, major European markets struggled with bouts of selling. 11 out of the 13
sectoral indices on BSE were in positive zone. Consumer Durables led the pack of gainers, followed by Information Technology and Realty.
The broader market also held its gains and the BSE Mid-cap and Small-cap indices ended higher by 0.73% and 0.43%, respectively. The
market breadth was positive.
Food inflation in the country is again on the rise after having declining for several weeks due to improved supply of food commodities and
activation for high base effect from the previous year. Overall outlook of the food inflation in this wake becomes clouded, contradicting the
expectations of the government and the central bank.
Inflation in the food articles group climbed to 14.44% in the week ended 18 December 2010 from 12.13% in the previous week. This was the
fourth instance of an increase in food inflation after easing for seven consecutive weeks. Inflation in the Primary Articles group jumped to
17.24% in the week under review from 15.35%. Inflation in the Fuel & Power group inched higher to 11.63% in the week ended 18
December from 10.74% in the week ended 11 December.
The BSE 30-share Sensex was up 133 points or +0.66% at 20389 while NSE 50-share Nifty ended the day at 6091 up 31 points or +0.50%.
Stocks Performance Top 3 Sensex Gainers:
Realty Stocks: IB Real estate (+5.7%), Parsvnath Develpoers (+4.4%), Sobha Developers (+3.2%) NTPC (+2.0%),
Wealthy investors wanting an exposure to real estate are now routing their money through private equity Hero Honda (+1.9%),
funds that invest in the sector, instead of debt instruments of individual companies. The aversion to real Tata Motors (+1.9%)
estate paper is due to worries about the health of these firms, with banks refraining from lending to them
and business slowing due to a drop in demand for properties. Top 3 Sensex Losers:
HDFC Bank (-1.2%),
Fertiliser Stocks: Chambal Fert. (+3.7%), United Phosphorus (+3.6%), Nagarjuna Fert. (+3,3%) ONGC (-0.7%),
Fertiliser shares rose across the board on renewed buying. Bajaj Auto (-0.3%)
F&O Update Top 3 Sectoral Gainers:
Market gained 32 points while VIX went down to 17.02% decreasing by 0.66% from Wednesday’s level. CD (+1.2%),
Jan series PCR is at level of 1.56. On put side Maximum OI is at 6000, 5900, 5800, 5700 level while 6100 REALTY (+1.2%),
added significant open interest today, signifying we would have good support at 6000 level. Call side has IT (+1.1%)
maximum OI at 6100, January NIFTY futures gained premium over the spot to magnitude of 26 points. As
mentioned in our earlier posts, Opportunist trader should avail low IV scenario towards expiry to Long out
of money positions, which have paid handsomely on Long Call side this time. Wish all the beloved readers
Happy and Fulfilling New year coming our way.
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