Markets kick-started 2012 on a positive note. The week that just ended showed signs that the optimism can last longer. Headline indices Sensex and S&P CNX Nifty gained 3.6 per cent each during the week ended January 20, thanks to combination of global and domestic factors. Strong rally in Asian markets, successful European sovereign debt sale, moderating inflation, all helped the equity markets. With food inflation continuing to decline, the likelihood of interest ate cut by the RBI has also increased.

Anticipating such a move, rate sensitive sector indices (in the BSE) Realty, Bankex and Auto gained. Defensives such as FMCG, IT and Healthcare sectors underperformed the broad market.

Good earnings numbers (December quarter) from the initial set of Indian companies that announced their results, also made its mark on the market.

Stocks of Bajaj Auto, Hero Motocorp, Axis Bank, NIIT Tech, Jindal Steel and Power, Bajaj Finance and Wipro rallied after their results were out while SKS Microfinance, Dish TV and ITC corrected post-results.

Reliance Industries was in news for various reasons this week. The company is said to have picked stake in Den Networks. Den Network's stock gained 22 per cent in a week. The stock of Reliance Industries gained 8.4 per cent after speculation that it will be buying back its shares. The news of buyback along with its results were announced after market hours on Friday.

State Bank of India's stock returned 8.7 per cent in a week. Besides expectations of rate cut, clarity on capital infusion from the government helped the stock.

Reliance Capital's stock rose 7.8 per cent last week after Nippon Life picked 26 per cent stake in the company's subsidiary Reliance Mutual Fund . Another company from the same group, Reliance Communication , secured funding to refinance its upcoming payment on foreign currency convertible bonds. The stock closed the week with 3.3 per cent gain.

Tata Steel gained 5 per cent after its promoter hiked its stake through warrant conversion. This infused Rs 713 crore in to the company.

Aviation stocks attracted lot of interest after the Aviation Ministry indicated ‘broad consensus' in the Government to allow foreign airlines to invest up to 49 per cent in Indian aviation companies. Stocks of Jet Airways, Spicejet and Kingfisher closed the week with gains of 10.8 per cent, 6.5 per cent and 5 per cent respectively.

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