MUMBAI (TIP): Boosted by a $20-billion foreign fund inflow and strong gains in exporters like software and pharma sectors, which benefited from a weak rupee, the sensex closed nearly 9% up in 2013, ending a volatile year on a positive note. This was the second-highest yearly FII flow for the Indian market, Sebi data showed. The year that just ended could be described as the year of software stocks with sector leader TCS gaining 73%, Wipro 61% and Infosys 50%, which took the BSE IT index up by 60%.

The year also witnessed strong gains for a host of pharma stocks with Sun Pharma rallying over 54% and Dr Reddy’s Labs closing with a gain of nearly 39%. Boosted by such strong performance, the healthcare index closed 22.6% higher. Among the laggards, real estate stocks continued their weak performance with the realty index on BSE sliding 32% on the year. It was also a bad year for PSU stocks with SBI, BHEL, Coal India and NTPC among the top five sensex laggards.

During the year, for a couple of months, the Indian market was out of the elite club of countries with $1- trillion market capitalization when in July-August the rupee was falling sharply but it ended the year at about $1.13 trillion (nearly Rs 70 lakh crore). With a general election round the corner and global uncertainties continuing, 2014 could be even more volatile, but there is strong hope that markets are going to rally, brokers said. According to Anup Bagchi, MD & CEO, ICICI Securities, agri and rural consumption will occupy centre stage, and the robust exports by IT, pharma, commodity exporters and companies with global footprints would continue their strong showing.

“High cost of funds, sluggish demand for corporate credit and elevated NPA levels will impact banks. Due to favourable regulations and easing competition in certain sectors like oil & gas, mainly the private sector companies and telecom are expected to benefit,” Bagchi said. According to Arun Kejriwal, director, KRIS, an investment research and advisory firm, so far, despite the US Fed announcing a tapering of its easy liquidity policy, FIIs have not turned negative on the Indian market, which is a very positive sign. “Till FIIs turn negative, there is no problem,” Kejriwal said.

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