Indian equity markets, which witnessed massive volatility throughout the week, ended on a positive note. In the last five trading sessions of the week, domestic markets rallied on the back of international and national events like the US elections, the Prime Minster’s meeting with corporate leaders, and several measures by the government to tame the liquidity crisis.

The 30-share Sensex of the Bombay Stock Exchange (BSE) gained 176.23 points, or 1.80% during the week to close at 9,964.29 points on Friday. The broader S&P CNX Nifty of National Stock Exchange (NSE) also added 87.40 points or 3.03% to end the week at 2,973 points.

Stock brokers said domestic markets will act in a range-bound manner in the coming days. Sudhir Nayak, vice president of Bonanza Portfolio Ltd, said, “Currently, the Indian markets are driven by international events. We assume that markets are going to remain volatile in the coming days and will look to the international markets for cues.”

The week started with a brilliant positive rally at Dalal Street on Monday, on the back of a cut in CRR, SLR and repo rate by the central bank last Saturday. Domestic markets extended their gains for the second day on Tuesday, after the finance minister’s meeting with heads of public sector banks.

However, markets snapped their winning streak on Wednesday on concerns over the troubled state of economy in the midst of the US presidential elections and weak cues from global markets. Losses extended after a sudden increase in inflation figures; the figures were following a downward trend for the past five consecutive weeks.

However, on Friday, the last trading day of the week, bulls managed to shatter the bears on the back of strong cues from the Asian and European markets, coupled with genuine buying across the board. The Sensex gained 230.07 points or 2.36%, while Nifty rose 80.35 points or 2.78% during the day.

An analyst from a leading broking house said, “Domestic markets opened on negative terrain but recovered from the low with genuine buying during the last trading hours of the day, coupled with strong opening of European markets. The sentiments also boosted after the central bank in South Korea slashed interest rates by 25 bps. This helped Asian markets climb up the hill.”

Dealers in the market also said that economic data which came later in the day showing that output of Indian infrastructure grew 5.1% in September 2008 over the same month a year ago also had a positive impact on the markets. All the sectors in the BSE sectoral indices ended the day on a positive note, with power, oil and gas and metal ending with higher gains.

The breadth of the markets was positive throughout the day, as out of 2,616 stocks traded on BSE, 1,417 stocks advanced, 1,124 stocks declined and 75 stocks remained unchanged. In the Sensex, 25 stocks ended in green; 5 stocks ended in red.

However, some players in the markets feel that a bounce back in the markets was technical in nature. Markets might witness a further downward trend in the coming days, they opined.

Ups and downs

•Dalal Street saw a brilliant rally on Monday, on the back RBI measures

• Gains extended on Tuesday, after the FM’s meeting with heads of PSBs

• Markets snapped on Wednesday, on concerns over the US elections and weak global cues

• Losses extended after a sudden increase in inflation figures