For a change, there was a weekly drop in the Sensex and the Nifty. This was welcome, given the huge rally that we have seen in stocks in the last three months.
This week the initial drop at the start of the week was largely on the back of rising crude prices. Tensions in Saudi Arabia, following the consolidation of the Crown Prince, who is likely to succeed his father as the next King of Saudi Arabia, saw prices of crude oil rallying.
Indian stocks tend to react adversely to a rally in crude prices, which is what happened over the course of the week. Individual stocks reacted to their earnings. Tata Motors posted a good set of quarterly numbers and so did State Bank of India.
Next week markets will watch the results of Bank of Baroda to see, if there is any improvement in the asset quality. Mahindra Logistics also got listed this week and made a very tepid debut. The stock almost ended the week flat, without any significant gains.
Shares in SRF fell after the company reported a lower than expected profits. Shares of rice makers were also volatile during the course of the week, after reports that the European Union has tightened fungicide rules.
State Bank of India was the star this week rallying as much as 6 per cent, after its non performing assets dropped and provisions declined. The stock was up a huge 6 per cent on Friday, following its results. ICICI Bank too gained on a more sentimental impact.
Markets are just 2 per cent below their peaks and hence expensive. Buying at these levels, tantamounts to a fair amount of risk.