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Equity market dodges oil bullet, surges on trade talks (Market Review)

IANS  |  Mumbai 

Despite a rise in global and heavy outflow of foreign funds, the Indian equity market logged gains during the week ended on Friday, partly owing to an ease in liquidity and hopes of the US-trade war being resolved.

According to market observers, initially, stock-specific buying on the back of expectation of healthy third quarter earning results led the market higher, but results from private banks and the IT sector disappointed.

Accordingly, the volatile week saw the Sensex gain 314.74 points or 0.88 per cent, and Nifty50 scale-up only 67.6 points or 0.63 per cent.

"Market started-off on a positive note on the back of easing liquidity situation, appreciation in INR and selective buying in FMCG, banks on expectation of strong earnings," of Research Vinod Nair said.

"However, investors turned cautious as private banks reported higher NPAs and margin disappointment from the IT sector. While a potential settlement of the trade dispute helped to re-test $60 in the last couple of days, leading to depreciation in the rupee."

Index-wise, the gained 314.74 points, or 0.88 per cent, to close at 36,009.84, whereas the 50-share Nifty of the NSE gained by 67.6 points, or 0.63 per cent, to settle at 10,794.95.

Globally, investors were upbeat as a resolution in the US-trade tension seemed near. However, the talks which concluded this week failed to completely convince market participants.

"Investors are waiting for further guidance from the US-trade negotiations. Meanwhile, China's economy is slowing and facing increasingly powerful headwinds. rose sharply amid easing concerns about energy demand," & CMD told IANS.

Sunsequently, the rise in depreciated the currency, which eneded the week lower against the US dollar. It weakened by 77 paise to 70.49 against the dollar from its previous week's close of 69.72.

"The rupee touched a strong point of 69.24 last week and started weakening thereafter in response to a 20 per cent expensive crude from lows of $50 to a barrel," Sajal Gupta, Edelweiss Securities' of Forex and Rates.

"The rupee has got concerns from rising crude and the risk of fiscal slippages in a poll bound nation... any breach above 70.60 levels can take it to 71.50 levels."

Besides, the Indian markets were dented by an outflow of foreign funds, as FIIs were net sellers to the tune of over Rs 500 crore as against domestic institutional investors, who bought over Rs 1,100 crore worth of stocks, provisional data on BSE showed.

"The market breadth was negative in four out of the five trading sessions of the week. The top sectoral gainers for the week were the FMCG, Pharma and IT indices. The top losers were the Metal, Media and Energy indices," of said.

The top gainers on the BSE and the NSE were which gained 7.53 per cent and which was up 5.59 per cent. ITC inched up over 5 per cent while (DVR) and gained in the range of 3 to 5 per cent.

In contrast, export-oriented lost 3.08 per cent followed by Yes Bank, Tata Steel, and declining in the range of 2 to 3 per cent.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, January 12 2019. 19:10 IST