Equities resume bull run on foreign funds' inflow, strong rupee (Market Review)

Indian equity markets resumed their bull run during the just concluded weekly trade session, as hefty inflow of foreign funds, a strong rupee and positive global cues enhanced the risk-taking appetite of investors.

Besides, investors factored in a BJP victory in Uttar Pradesh, which helped to sustain positivity in the equity markets.

However, caution ahead of a possible interest rate-hike during the US Federal Open Market Committee (FOMC) meet as well as plunging commodity prices capped gains.

The key indices, which had surged to new closing-high levels in two years on the first day of the trading week, pared most of their gains to close on a marginally higher note.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 113.78 points or 0.39 per cent to close at 28,946.23 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) was up by 37 points or 0.42 per cent to 8,934.55 points.

"Markets continued to consolidate in a narrow range for the second consecutive week ahead of the outcome of assembly election results," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

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

Market observers pointed out that global market participants were on close watch for the US non-farm payroll report.

"At present, global markets are doing well. Market participants across the globe are closely watching the US non-farm payrolls report as a robust report could give rise to speculation that the (US) Fed could hike rates not just three but even four times this year," D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, cited.

"The domestic markets continued to witness volatile trade throughout the week, ahead of the outcome of the state election. It could be seen that now foreign market participants are showing interest in the Indian markets."

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 5,957.40 crore during the week, while domestic institutional investors (DIIs) divested scrip worth Rs 3,293.76 crore.

Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs 8,667.45 crore, or $1.29 billion, from March 6-10.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the equity markets closed the week' trade with firm sentiments tracking bearish USD/INR futures prices and continued buying support.

The Indian rupee strengthened by 20 paise to 66.61 against a US dollar from last week's close of 66.81.

"Sentiments got some support after Prime Minister Narendra Modi expressed hope of reaching a breakthrough on the Goods and Services Tax (GST) bill in the Budget session of Parliament that resumed (this week) after a month-long break," Desai explained.

"Some support also came with the report that foreign investments in the services sector increased 77.6 percent to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business."

On technical levels, Rakesh Tarway, Head of Research, Reliance Securities, explained that the Nifty failed to cross its 52-week high and ended the trading week in a very narrow range.

"Among the sectors, it was a mixed bag, with banks gaining 1.1 per cent, auto by one per cent and energy by 0.4 per cent, while metals corrected by 4.8 per cent, pharma by 1.4 per cent and IT by 0.5 per cent for the week," Tarway added.

The top weekly Sensex gainers were: State Bank of India (SBI) (up 2.60 per cent at Rs 272.05), Bharti Airtel (up 2.59 per cent at Rs 364.80), Tata Consultancy Services (TCS) (up 1.98 per cent at Rs 2,541.80), Tata Motors (up 1.92 per cent at Rs 468.95) and Reliance Industries (up 1.82 per cent at Rs 1,281.40).

The losers were: Tata Steel (down 5.49 per cent at Rs 467.80), Dr Reddy's Lab (down 5.30 per cent at Rs 2,719.85), Gail (down 3.03 per cent at Rs 378.45), ICICI Bank (down 1.92 per cent at Rs 270.55), and Lupin (down 1.68 per cent at Rs 1,446.50).

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

--IANS

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