Equities gain as healthy Q3 results trigger buying (Market Review)

Indian equities markets sustained their upward journey during the trade week ended Friday, as healthy quarterly earnings' results, along with expectations of more spending support from the upcoming Union Budget and upbeat macro-economic data, buoyed investors' sentiments.

The key domestic indices closed the week ended January 13 with gains of around two per cent each, despite huge volumes of foreign funds' outflows, depreciation in the rupee value and broadly mixed global cues capping gains.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 478.83 points or 1.8 per cent to 27,238.06 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 156.55 points or 1.9 per cent to 8,400.35 points.

"After consolidating last week, the Nifty surged higher this week and reversed the intermediate downtrend in the process," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

"Market breadth was positive in three out of the five trading sessions of the week."

According to D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, the domestic markets continued to see an upward trend on expectations surrounding Q3 earnings and the upcoming Union Budget that helped investors shrug-off mixed global cues.

"Moreover, Prime Minister Modi's statement that India is on the threshold of becoming the most digitised economy in the world boosted the sentiments of the market participants," Aggarwal pointed out.

"The recent IIP (Index of Industrial Production) numbers showed growth, essentially on the back of a positive base effect. Growth in India's industrial activity (IIP) in November stood at a 12-month high of 5.7 per cent post demonetisation."

Further, official data released on Thursday revealed that the country's retail inflation (Consumer Price Index) declined to 3.41 per cent in December from 3.63 per cent in the month before.

The easing of key prices has made the context favourable for a rate cut by the Reserve Bank of India (RBI) at its monetary policy review due next month.

"Sentiments remained upbeat after Finance Minister Arun Jaitley dismissed the slowdown concerns and said that higher tax mop up indicates an uptick in economic activity," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

On the global front, market participants across the globe traded on a mixed note after US President-elect Donald Trump, during his first press meet, failed to provide details on the fiscal policies that were expected to bolster the economy.

"Even the US dollar got badly hit, disappointing bulls who had bet on major stimulus," Aggarwal pointed.

"Crude oil prices, which were moving flat to negative, suddenly moved higher, bolstered by the news that Saudi Arabia had cut oil output to its lowest in almost two years."

Furthermore, the Indian rupee weakened by 19 paise to 68.16 against a US dollar from last week's close of 67.97.

"Indian equities markets continued with firm sentiments, despite outflow of money from the FIIs (foreign institutional investors), as the DIIs (domestic institutional investors) injected more money into the market," Desai added.

In terms of investments, provisional figures from the stock exchanges showed that while the domestic investors purchased scrips worth Rs 882.75 crore, the week witnessed a massive outflow of foreign funds worth Rs 1,103.96 crore.

Figures from the National Securities Depository (NSDL) disclosed that FPIs (foreign portfolio investors) were mainly net sellers in the stock market. They sold a total of equity and debt instruments worth Rs 2,685.03 crore, or $394.38 million from January 9-13.

The top Sensex gainers during the period under review were: Tata Steel, (up 6.36 per cent at Rs 446.40), Power Grid (up 4.48 per cent at Rs 197.20), NTPC (up 4.36 per cent at Rs 171.05), Axis Bank (up 3.97 per cent at Rs 472.95) and ICICI Bank (up 3.64 per cent at Rs 267.55).

The losers were: Dr. Reddy's Lab (down 5.62 per cent at Rs 2,983.05), Tata Consultancy Services (TCS) (down 1.38 per cent at Rs 2,252), Lupin (down 1.17 per cent at Rs 1,494.70), Hero MotoCorp (down 0.78 per cent at Rs 3,044.65), and ONGC (down 0.72 per cent at Rs 201).

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

--IANS

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