Although there is no weakness on the bourses; reversal may happen anytime

This week which opened with pessimism among investors, has ended on a positive note with a hope of talks on re-opening the US government.

The BSE 30-share Sensex rose  612.6 points (or 3.1%) to close the week at 20,528.6, while the Nifty settled at 6,096.2, up 188.9 points (or 3.2%).

On Monday, the market had a weak opening as US government shutdown was entering its second week with no hope in sight for a near-term resolution. Sensex closed marginally down on Monday. Post the market close, the Reserve Bank of India (RBI) announced measures to improve liquidity. The marginal standing facility (MSF) rate was reduced by 50 basis points to 9% with immediate effect. It was also decided to provide additional liquidity through term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities of the banking system through variable rate auctions on every Friday, beginning 11 October 2013.

The liquidity infusion by RBI had a positive impact on market on Tuesday. Sensex closed with a gain after hitting its highest levels since 23 September 2013. However, analysts foresee the MSF rate cut by a further 0.25%, but also fear a repo rate hike by 0.25% to contain inflation.

On Wednesday, the Sensex was on a gradual uptrend and ended positive for the second consecutive session, after the comments of the RBI governor Raghuram Rajan and the release of the provisional data which showed that India's trade deficit narrowed sharply in September. RBI governor said that the current account deficit (CAD) can be contained at $70 billion this fiscal. He also that he is working to turn investor sentiment positive for India to help boost GDP growth rate. India's trade deficit narrowed sharply to $6.7 billion in September 2013 from $10.9 billion in August 2013.

On Thursday, the market again ended positive after witnessing a volatile session. Globally there was optimism on the signs of progress in ending deadlock in Washington, after news that US President Barack Obama would meet House Democrats and House Republicans. House Republican and Senate Democratic leaders are open to a short-term increase in the $16.7 trillion debt ceiling, according to congressional aides who spoke on condition of anonymity.

Before the market trading hours on Friday, Infosys came out with the September quarter result. The company has raised its revenue guidance both in dollar terms and rupee terms for FY 2014. On the US front, House Republican leaders proposed a temporary extension of the nation's debt ceiling. This led the market to open with high optimism on Friday. The market closed with a gain for the fourth consecutive session.

Back home, among the other indices on the NSE, except for Media which ended flat with a negative bias all the other indices closed in the green. The top two gainers were Realty (9%) and IT Sector (6%).

Among the Nifty-50 stocks, the top five gainers were DLF (11%); Ranbaxy Lab (11%); Tata Motors (10%); Infosys (9%) and Bank of Baroda (8%) while the top five losers were Coal India (9%); Hindalco Industries (4%); Sesa Sterlite (2%); Cipla (2%) and ACC (1%).

Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors were: