Equities surge on foreign fund inflows, global cues (Market Review)

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Mumbai, Dec 10 (IANS) Indian equity markets embraced the bulls during the week ended Friday as investors’ sentiments were boosted by positive global cues, the rupee’s appreciation and fresh inflows of foreign funds.

The key Indian indices closed the trading week with gains of around two per cent each, as European Central Bank (ECB) decided to extend its asset purchase programme. Short covering by domestic investors supported the upward trajectory.

However, the rally was averted mid-week due to a slightly pessimistic mood that englufed the domestic markets on the Reserve Bank of India (RBI) decision to keep key lending rates unchanged and profit booking.

In addition, global markets were cautious ahead of the US Federal Open Market Committee’s (FOMC) rate setting meet to be held in the upcoming week.

The barometer 30-scrip sensitive index (Sensex) of the BSE surged by 516.52 points or 1.97 per cent to close the week’s trade at 26,747.18 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) gained 174.95 points or 2.16 per cent and closed at 8,261.75 points.

“In the week gone by, the US stock market made fresh highs, as a post-election rally continued following a key monetary policy announcement from the ECB. The market also got boosted after Chinese trade data came in unexpectedly strong,” D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.

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“On the domestic market front, market participants are closely watching each development of the winter session in the parliament; especially any progress regarding the goods and services tax (GST) bill.”

In the previous week ended December 2, the Indian equity markets had ceded their gains due to concerns over upcoming global events and profit booking.

The BSE Sensex had closed the week’s trade with a loss of 85.68 points or 0.33 per cent, whereas the Nifty was up by 11.15 points or 0.14 per cent.

The trading week opened on a positive note following a rebound in the European markets after the Italian referendum.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the unanimous decision of RBI Governor Urjit Patel-led Monetary Policy Committee (MPC) to keep the policy rate unchanged pressurised the market at higher levels.

“However, investors got some comfort with Asian Development Bank’s (ADB’s) report, that India’s growth prospects have got a boost from the acceptance of the 7th pay panel recommendations and likely implementation of the Goods and Services Tax (GST) regime next year,” Desai added.

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“Confidence was added after RBI deputy governor enlightened that the banking sector’s health is improving as bad loan accumulation has slowed and provision coverage has improved than in the previous quarters.”

Desai further said the foreign institutional investors which had resorted to selling after Republican Donald Trump became the US President-elect reversed their trend in the past few sessions.

In terms of investments, provisional figures from the stock exchanges showed the week witnessed a healthy inflow of foreign funds worth Rs 936.99 crore. The domestic investors purchased scrip worth Rs 296.57 crore during the just-concluded week.

The inflows had an impact on the Indian rupee, too, which touched its three-week high level during the intra-day trade on last Thursday.

The rupee appreciated by 78 paise to 67.42 against a US dollar from last week’s close of 68.20.

“The Indian rupee remained highly volatile last week but managed to end with sharp gains as against the dollar and tested three week high on the back of sustained selling of the US currency by exporters and banks amid a pointed rally in domestic equity market accompanied by foreign fund inflows,” SMC Global Securities said in a commentary to IANS.

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On the other hand, figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) were mainly net sellers in the debt market. They sold a total (equites+debt) instruments worth Rs 15,924.28 crore, or $2.34 billion from December 5-9.

The top weekly Sensex gainers were: Adani Ports, up 7.26 per cent at Rs 285.75, followed by Tata Motors (up 7.16 per cent at Rs 464.05), Tata Steel (up 5.88 per cent at Rs 430.30), ONGC (up 5.37 per cent at Rs 306.90) and State Bank of India (SBI) (up 4.56 per cent at Rs 266).

The losers were: Sun Pharmaceuticals (down 6.46 per cent at Rs 673), Tata Consultancy Services (TCS) (down 1.37 per cent at Rs 2,193.45), Axis Bank (down 0.76 per cent at Rs 456.30), Gail (down 0.65 per cent at Rs 429.05) and Wipro (down 0.30 per cent at Rs 458.70).

(Porisma P. Gogoi can be contacted at [email protected])

–IANS

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