The surge was witnessed across-the-board with the exception of tech stocks, which more or less remained steady during the week. The Sensex gained a hefty 106.58 points or 3.61 per cent during the week to close at 3,056.58 points. Though the Sensex gained over 3.5 per cent during the week, the real trend-setter during the week remained the non-Sensex stocks, led by the banking and the auto ancillary sectors. The euphoria in these two counters was so strong that a host of banking and auto ancillary stocks hit an all-time high during the week.
Institutional investors as well as retail players were active in mid-cap stocks in the old economy sectors, especially of those companies which have improved their performance in the recent past thanks to restructuring and better cost control. Dealers said: "After burning their fingers in the new economy stocks in the last few years, investors have started to look at old economy stocks again, with more cautious investors betting on high-dividend yield stocks. With the softening of interest rates, investors who earlier parked their money in debt-mutual funds, have started to look at high-dividend yield stocks."
With bank stocks getting re-rated last week, State Bank of India (SBI) surged 10.68 per cent to Rs 316.10 during the week, ICICI Bank up 8.37 per cent to Rs 135.35, Canara Bank higher by 12.15 per cent to Rs 104.80, Punjab National Bank firmer by 13 per cent to Rs 139.95, Bank of Baroda up 23.99 per cent to Rs 109.05 and Corporation Bank stronger by 12.23 per cent to Rs 159.85.
Dealers said the Securitisation Act has helped the sentiment for stocks in the banking sector. The Act allows lenders to attach assets of defaulting borrowers without having to go to court for the purpose. Apart from the banking sector, strong gains were also witnessed in the auto ancillary stocks on hopes that the sector may witness a substantial growth of about 40-45 per cent in FY 2003-04.
Dealers said: "Reports that global original equipment manufacturers (OEM) have plans to procure automobile components worth $15 billion from India by 2010. In the last one year, the auto-ancillary companies have fared well following the rise in demand from the domestic automobile sector mainly from the makers of commercial vehicles and two-wheelers."
The solid gainers during the week in auto ancillary sector includes: Bharat Forge, Sundaram Clayton, Sundram Fastners, MICO, Sona Steering etc.
However, some dealers said, the gains during the week were also helped following the clubbing of settlements on account of bank holidays on Thursday and Friday. The settlement for trades carried out on May 14, 15 and 16 will take place on May 20, which will allow investors and brokers sufficient time to make arrangement for funds.