Riding on the outcome of the just-concluded assembly elections, key Indian equity indices zoomed to new 52-week highs and crossed their psychologically significant levels. The benchmark NSE Nifty hit a record intra-day high and closed above the 9,100-mark for the first time during the truncated week ended Friday….writes Porisma P. Gogoi
On Friday, the wider 51-scrip Nifty of the National Stock Exchange (NSE) touched a new record intra-day high of 9,218.40 points. Similarly, the Sensex touched a new 52 week-high of 29,824.62 points.
The bull run continued for the second consecutive week as the outcome of the assembly elections in five states and positive global cues enhanced the risk-taking appetite of investors.
The positivity in the equity markets was also favoured by a strong rupee and substantial inflows of foreign funds.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 702.76 points or 2.43 per cent to close at 29,648.99 points, while the NSE Nifty was up by 225.5 points or 2.52 per cent at 9,160.05 points.
“Markets zoomed higher this week to touch new life highs. The Nifty closed above the 9,100 level for the first time ever,” Deepak Jasani, Head – Retail Research, HDFC Securities, said.
Market observers pointed out that the BJP victory in Uttar Pradesh and Uttarakhand assemblies elevated the mood of the Indian equity markets.
“The election results will provide the much needed boost to the ruling-BJP to accelerate the pace of reforms, including the roll-out of the crucial Goods and Services Tax (GST), slated to be implemented from July 1, 2017,” said Vijay Singhania, founder and Director of brokerage firm Trade Smart Online.
D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, said: “In the week gone by, the global markets moved higher and higher as confidence continued to return to the markets, and also after the (US) Federal Reserve indicated it was unlikely to speed up monetary tightening.”
On Wednesday, the benchmark Indian indices well-absorbed the 25 basis points (bps) rate hike by the US Federal Reserve for the second time in three months and the third time since the 2008 global financial crisis.
“Moreover, the industrial activity has shown some improvement in January, after the contraction in December, which also indicated that the negative effects of demonetisation are gradually waning,” Aggarwal said.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the Indian equity markets traded with firm sentiments tracking bearish USD/INR futures prices and continuous buying support.
“Continuous funds flow witnessed by FIIs (foreign institutional investors) in this week indicated continuation of uptrend in the Indian equity markets,” Desai pointed out.
The Indian rupee strengthened by 1.15 paise to 65.46 against a US dollar from last week’s close of 66.61.
In terms of investments, provisional figures from the stock exchanges showed that FIIs purchased stocks worth Rs 8,121.51 crore during the week, while domestic institutional investors (DIIs) divested scrip worth Rs 2,192.86 crore.
Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs 7,495.85 crore, or $1.13 billion, during March 14-17.
Commenting on sector-specific movement, Rakesh Tarway, Head of Research, Reliance Securities, said: “FMCG gained by 5.1 per cent, high beta sectors like realty and metals also reversed its last week losses to gain by 4.9 per cent and 3.1 per cent respectively, while other sectors gained by around 2.5 per cent.”
The top weekly Sensex gainers were: Adani Ports (up 7.93 per cent at Rs 324.60), Tata Steel (up 6.93 per cent at Rs 502.05), ITC (up 6.19 per cent at Rs 281.20), HDFC (up 5.74 per cent at Rs 1,450) and Larsen and Toubro (L&T) (up 4.99 per cent at Rs 1,550.70).
The losers were: Coal India (down 8.94 per cent at Rs 289.75),Bharti Airtel (down 3.77 per cent at Rs 346.80), Gail (down 1.23 per cent at Rs 374.75), Power Grid (down 0.39 per cent at Rs 193.50), and Mahindra and Mahindra (M&M) (down 0.07 per cent at Rs 1,303).