Equities close with marginal gains; healthcare stocks, DIIs aid bull run (Market Review)

Continuing the bull run for the second consecutive week, key Indian equity indices -- the Sensex and the Nifty50 -- closed with minimal gains as short covering in healthcare and banking stocks coupled with continuous purchasing activities by domestic institutional investors (DIIs) kept market sentiment afloat.

On a weekly basis, the 30-scrip Sensitive Index (Sensex) of the BSE rose by 71.38 points or 0.99 per cent to close at 31,596.06 points.

Meanwhile, the Nifty50 of the National Stock Exchange (NSE) closed at 9,857.05 points, up 19.65 points or 0.2 per cent.

"Nifty witnessed minor upside bounce this week and closed the week with minor gains of around 20 points (0.20 per cent). Sectorally, the top weekly gainers were the pharma, metal and banking indices, while the losers were IT and FMCG indices," Deepak Jasani, Head of Retail Research, HDFC Securities, told IANS.

According to D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, the domestic market took pressure due to crack-down of market regulator Securities and Exchange Board of India (SEBI) on shell companies and geopolitical tension between India-China and USA-North Korea.

"However, on Wednesday, domestic market moved little higher aided by fresh buying mainly in realty, healthcare and banks, coupled with positive global cues," Aggarwal told IANS.

"Also, the news that the Union Cabinet has moved another step towards the merger of some of the state-owned banks supported the bulls."

On August 23, Finance Minister Arun Jaitley announced that "in principle" approval has been granted by the Union Cabinet for the consolidation of state-run banks through mergers. The announcement led to massive gains in public sector bank's (PSU banks) stocks.

On the currency front, the Indian rupee strengthened by 10-11 paise to close the week at 64.03-04 to a US dollar from its previous week's close at 64.14.

Vinod Nair, Head of Research, Geojit Financial Services, observed that pull-out of foreign funds and persistent miss in quarter earnings, which could end up with drop in FY18 profit-after-tax estimate, kept investors a little jittery.

"Month-to-date, foreign institutional investors (FIIs) were net sellers in the market on concerns of premium valuation, whereas DIIs continued to pour money into domestic market, which is keeping the market trend positive. Further, short covering due to shorter trading days (Friday which is a holiday) and nearness of August futures and options (F&O) expiry also supported the sentiment," said Nair.

Provisional figures from the stock exchanges showed that FIIs sold stocks worth Rs 4,666.53 crore, while DIIs bought scrips worth Rs 2,883.99 crore during August 21-24.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 5,281.52 crore, or $824.17 million, during the trade week ended August 24.

"IT sector continued to witness pressure due to recent management turbulence in Infosys despite a premium buyback announcement. NPA (non-performing assets) worries in PSU Banks may cloud the outlook, whereas cabinet nod for fast track consolidation of PSU banks attain investors attention," added Nair.

The top weekly Sensex gainers were: Bharti Airtel (up 3.95 per cent at Rs 433); Lupin (up 3.95 per cent at Rs 991.75); Dr Reddy's Lab (up 3.88 per cent at Rs 2,087.90); Tata Steel (up 2.09 per cent at Rs 638.95); and Axis Bank (up 1.77 per cent at Rs 505.60).

The losers were: Infosys (down 10.64 per cent at Rs 912.50); NTPC (down 4.35 per cent at Rs 169.15); Bajaj Auto (down 3.15 per cent at Rs 2,731.85); Hero MotoCorp (down 3.06 per cent at Rs 3,874.50); and Adani Ports (down 2.64 per cent at Rs 379.95).

(Porisma P. Gogoi can be contacted at porisma.g@ians.in)

--IANS

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