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The benchmark indices ended higher this week, as foreign institutional investors (FIIs) remained overweight on India and continued their buying spree. Further, a good voter turnout raised prospects of a victory for the Bharatiya Janata Party, which is viewed as business-friendly.
The 30-share Sensex ended 269 points, or 1.2 per cent, higher at 22,629, while the 50-share Nifty closed at 6,776, a gain of 82 points.
FIIs have been aggressive buyers in Indian equities, purchasing stocks worth about Rs 7,000 crore so far this month. During the first three months of this year, FIIs were net buyers in Indian equities to the tune of Rs 22,196 crore, according to data available on the Securities and Exchange Board of India website.
Meanwhile, buying in the broader market helped the mid-cap and small-cap indices outperform benchmark indices. The BSE mid-cap index gained two per cent, while the BSE small-cap index surged 3.6 per cent. On Friday, the two indices had touched 15-month highs, after having gained nine and 13 per cent, respectively, in the past month.
The BSE mid-cap index closed at 7,338, up 0.09 per cent compared to its previous close.
Analysts said large-caps had seen a sharp surge in the first part of the rally, which started in February. But since valuations in these stocks were starting to seem stretched, the focus had shifted to mid-caps, they added.
For March, the country’s trade deficit hit a five-month high of $10.51 billion, as merchandise exports declined and oil imports rose, data from the Ministry of Commerce and Industry showed. The Index of Industrial Production (IIP) for February fell 1.9 per cent, against a rise of 0.8 per cent in January.
The week saw Sun Pharma’s acquisition of Ranbaxy Laboratories. The landmark all-share $4-billion transaction will create the world’s fifth-largest generic drug maker by sales. Under the terms of the agreed deal, Ranbaxy shareholders will get 0.8 Sun Pharma share for every Ranbaxy share they hold.
Sesa Sterlite released production data for the fourth quarter and the year ended March. Mined metal production for the year stood at 880,000 tonnes, marginally higher than in the previous year. In the banking pack, State Bank of India closed 4.5 per cent higher, after the state-owned banking major tapped the foreign bond market with a two-tranche benchmark issue of five- and 10-year maturities to raise up to $1 billion.
Automobile major Maruti Suzuki ended with marginal gains. The company is recalling 103,311 units of its models Ertiga, Swift and DZire made between November 12 and February 4, to replace faulty fuel filler necks.
Tata Motors ended 4.5 per cent higher, after Jaguar and Land Rover (JLR), its UK-based arm, registered 2.7 per cent year-on-year growth in retail sales in March. However, for FY14, JLR registered robust 15.9 per cent annual growth at 434,311 units, riding on the strong momentum in recently-launched models.
Week ahead
Next week, markets are likely to remain volatile, with only three trading sessions. For the remaining phases of the polls, the voter turnout will be keenly watched. The government will release inflation data based on the Consumer Price Index and Wholesale Price Index on Tuesday.
The information technology sector will be in focus, as Infosys kicks off the fourth-quarter earnings season on Tuesday, followed by TCS on Wednesday and Wipro and HCL Technologies on Thursday. Index heavyweight Reliance Industries will announce its earnings on Friday.
Markets will remain closed for trading on April 14, on account of Baba Saheb Ambedkar Jayanti and on April 18, on account of Good Friday.
