Sensex, Nifty off from new peak on profit-booking, close higher

After rallying to new peak on crude oil drop and fund inflows, profit-booking by operators in a mid-week ahead of key macro economic data on late Friday kept the Sensex and Nifty under check, still ending up by 0.13 per cent and 0.23 per cent respectively, extending gains for the fifth straight week.

The market commenced the week on a strong footing as overseas funds increased bets on growth optimism and a lower oil price which gave a boost to sentiments.
Later, the tussle was seen throughout the week between bulls and bears that saw the former gaining dominance over the latter, as both the key indices survived to end in green.

Hopes of further implementation of reforms by the new government kept the market from falling further.Supreme Court Reserving order on Coal Block allocation case led to uncertainty for the market players.

Weakness in emerging markets on expectations of earlier key interest rates hike by the US Federal reserve, which might force foreign funds to shift their funds from emerging markets, also weighed on the market sentiment.

A lower crude price will help India, which imports about 80 per cent of oil needs, to contain CAD and fiscal deficit.The end-session saw some buying by operators in blue-chip stocks and also retail investors in second-line counters, helping the sensex to land in positive terrain at close.

The sensex opened higher at 27,145.12 and surged to an intra-day record high of 27,354.99 and fell back below 27K-mark at 26,904.50, before recovering some ground to settle the week at 27,061.04, showing a small gain of 34.34 points or 0.13 per cent.

In straight five-week, it has zoomed 1,731.90 points or 6.84 pct. The NSE 50-share cnx Nifty moved in a range of 8,180.20 --intra-trade historic high-- and a low of 8,057.30 before finishing at 8,105.50, showing a gain of 18.65 points or 0.23 per cent.

Oil & Gas shares, which were at the forefront at initial stages after brent crude for October fell below $100 a barrel besides hopes of further reforms, fell back sharply on expectations of cut in petrol and diesel rates due for revision on September 15.
 After lingering worries over early Fed rate hikes, the Obama promised to defeat militants in oil producers Syria and Iraq, which also put pressure on market.
Tyre shares were in the limelight on hopes that recent sharp fall in rubber prices could boost the profitability of these companies. Apollo Tyre, Ceat Tyres, Dunlop India, Falcon Tyre, Goodyear India, JK Tyres, MRF and TVS Shrichakra notched handsome gains.

Heavy sell-off was seen in Sun Pharma, ONGC and Coal India after mid-week. Sun Pharma was the top loser from the sensex pack during the week with a fall of 6.10 per cent on reports of a surprise inspection by US Drug regulator at its Halol plant in Gujarat by US drug regulator.

ONGC, Coal India and NHPC dipped on some news that the Cabinet Committee on Economic Affairs (CCEA) approved stake sales in state-run companies ONGC, Coal India and NHPC at a discount to market price to get nearly Rs 45,000 crore this financial year as a part of government's divestment programme outlined in the Union Budget 2014-15. 

The factory output, as measured by the Index of Industrial Production  dropped to 4-month low of 0.5 per cent in July from 2.6 per cent in July 2013, leading to diminishing hopes of early recovery.