Equities extend gains on fund inflows, IMF's India growth outlook (Market Review)

Revival in corporate earnings, along with the country's healthy economic growth outlook projected by the International Monetary Fund (IMF) and massive inflow of foreign funds kept the bulls riding in the Indian equity markets during the truncated trade week ended Thursday.

However, the key indices took a breather on the last trading day (Thursday) and closed in the red -- snapping a six-day gaining streak -- as investors booked profits amid higher crude oil prices and caution over January derivatives expiry, market observers said.

Nevertheless, it was the eighth consecutive week of gains for the benchmark indices.

The barometer 30-scrip Sensitive Index (Sensex), which crossed the psychologically important 36,000-mark during the week, surged by 538.86 points or 1.52 per cent to close at 36,050.44 points.

The wider Nifty50 of the National Stock Exchange (NSE) crossed the 11,000-points-level for the first time during the week and closed Thursday's trade at 11,069.65 points -- up 174.95 points or 1.60 per cent from its previous week's close.

The indices scaled new records during the week.

On January 24, the BSE Sensex closed at a new high of 36,161.64 points after scaling a new high of 36,268.19 points during the intra-day trade.

On the same day, the Nifty50 closed at a new high of 11,086 points, after it scaled a fresh intra-day high of 11,110.10 points.

"Markets got a boost in the backdrop of budget expectations apart from positivity among investors on account of trade talks being held at Davos," D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, told IANS.

"Also, the bulls got support after government announced that it would infuse Rs 88,139 crore into 20 public sector banks through recapitalisation bonds and budgetary support in this financial year. The aim of the government is to strengthen these banks' lending capacity and thereby pulling the country out of a three-year low credit growth," he added.

The government on Wednesday announced plans to infuse over Rs 1 lakh crore, including Rs 80,000 crore through recap bonds and Rs 8,139 crore as budgetary support, during the current fiscal seeking to perk up public sector banks (PSBs) that have been hit by huge non-performing assets.

"Post re-capitalisation allocation worth Rs 880 billion, PSBs corrected. However, private bank and infra stocks gained," Arpit Jain, AVP at Arihant Capital Markets, told IANS.

"FIIs (foreign institutional investors) were net buyers during the month of January worth $1 billion," said Jain.

On the investment side, provisional figures from the stock exchanges showed that FIIs purchased scrips worth Rs 4,510.59 crore, while domestic institutional investors divested stocks worth Rs 1,452.38 crore during the week.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors bought equities worth Rs 5,990.74 crore, or $939.38 million, during January 22-25.

According to Vinod Nair, Head of Research, Geojit Financial Services, positive global cues and revival in earnings supported the underlying sentiments.

"The rally was broadbased led by IT, oil and gas, financials, metals, pharma and PSBs. In the latest World Economic Outlook, the IMF has projected India's GDP to grow at 7.8 per cent which helped the investor sentiments," said Nair.

"F&O (futures and options ) expiry, long weekend, oil prices at three year at $71/bbl, lack of fresh triggers post a series of new high and sell-off in PSB stocks limited gains for the week," he added.

On the currency front, the rupee strengthened by 30 paise to close at 63.55 against the US dollar from its last week's close at 63.85.

The top weekly Sensex gainers were: ONGC (up 7.32 per cent at Rs 208.25); Tata Consultancy Services (up 7.14 per cent at Rs 3,117.85); Yes Bank (up 6.83 per cent at Rs 363.50); Coal India (up 5.85 per cent at Rs 299.65); and Adani Ports (up 5.61 per cent at Rs 437.60).

The losers were: Bharti Airtel (down 8.47 per cent at Rs 452.60); Tata Motors (DVR)(down 6.10 per cent at Rs 228); Tata Motors (down 4.44 per cent at Rs 400.20); Wipro (down 4.32 per cent at Rs 311.95); and Asian Paints (down 3.36 per cent at Rs 1,149.75).

The equity markets were closed on January 26 (Friday) for Republic Day.

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

--IANS

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