By Porisma P. Gogoi and Rohit Vaid,
Mumbai, (IANS) : Despite positive global cues and healthy inflow of foreign funds, the Indian equity markets were able to achieve marginal gains during the week ended Friday.
Although the positive rub-off effect from the passage of a major economic reform — the GST (Goods and Services Tax) — was evident, profit booking at higher levels and disappointment over Reserve Bank of India’s (RBI) monetary policy review depressed the key indices during a major part of the week.
The 30-scrip sensitive index (Sensex) of the BSE gained only 74.05 points or 0.26 per cent during the week to end at 28,152.40 points.
However, the wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down by 11 points or 0.13 per cent to 8,672.15 points.
“This week was again full of lot of action. Still, the weekly gain is almost nothing for key indices and this is despite the strong Friday rally,” said Pankaj Sharma, Head of Equities, Equirus Securities.
“The good part is that every correction is followed by huge buying interest and that has been a strong driving force in last few weeks.”
The benchmark indices started off the week on a positive note as investors remained optimistic about the passage of the constitutional amendment bill in the Lok Sabha to enable the roll-out.
Other factors such as global credit rating agency Moody’s Investors Service’s statement lauding the GST constitutional amendment bill as credit positive for India’s sovereign and non-financial corporates supported the upward movement of the markets.
However, the key indices ceded their initial gains during the mid-week, edging lower over three trading sessions, mainly due to profit booking at higher levels.
“Indian equity markets traded with volatile sentiments last week mainly due to profit booking at higher levels from traders,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls told IANS.
Additionally, investors were disheartened over the decision of the Reserve Bank of India (RBI) to keep the key lending rates unchanged in its latest monetary policy review.
The repurchase (repo) rate, or the interest commercial banks pay the central bank for short-term loans, remained unchanged at 6.5 per cent. The cash reserve ratio (CRR) that scheduled banks have to keep in liquid funds also remained unaltered at four per cent of deposits.
“Investors remained on sidelines after the RBI at its policy meet kept key policy rates unchanged and retained FY17 GDP growth forecast at 7.6 per cent,” said Desai.
“Sugar stocks came under pressure after the food ministry recommended suspending futures trade in sugar for the time being and imposed stock holding limits on sugar mills.”
But a sharp rally on Friday aided the equity markets in wiping off initial losses and ending the week’s trade on a positive note.
On the global front, buoyant activity in Asian and European markets gave a fillip to investors’ sentiments.
The global markets were driven higher after the US indices recorded a new closing high on the back of a healthy rise in global crude oil prices.
The upward trajectory was also supported by better-than-expected Q1 (first quarter) results of the banking major State Bank of India (SBI).
In addition, the influx of foreign funds aided the markets in recovering from lower levels.
“Lifting of the ban on diesel cars and SBI’s results had helped auto and banking sectors to close the week on a bullish note,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
According to Devendra Nevgi, Chief Executive of ZyFin Advisors, the markets continued to be driven by foreign liquidity.
“FPIs (foreign portfolio investors) have net invested around Rs 48,000 cr since March 2016. On the other hand, domestic instituitions continue to be on selling side,” Nevgi said.
Provisional figures from the stock exchanges showed that the week witnessed a hefty influx of foreign funds worth Rs 3,524.96 crore.
Inspite of healthy inflow of funds, the rupee depreciated on a weekly basis. It weakened by 11 paise to 66.89 against a US dollar from its previous close of 66.78 on Aug 6.
Figures from the National Securities Depository (NSDL) showed that FPIs were net buyers of equities worth Rs 2,466.14 crore, or $368.53 million, from August 8-12.
Among the individual Sensex stocks, Adani Ports was the top gainer (up 10.03 per cent at Rs 257.30), followed by State Bank of India (up 4.47 per cent at Rs 243.20), Axis Bank (up 4.47 per cent at Rs 590.75), ONGC (up 3.23 per cent at Rs 233.10) and Tata Consultancy Services (up 3.15 per cent at Rs 2,732.35).
The losers were led by Lupin (down 5.71 per cent at Rs 1,578.85), Sun Pharmaceuticals (down 4.81 per cent at Rs 801.80), Bharti Airtel (down 4.58 per cent at Rs 346.55), Hero MotoCorp (down 3.52 per cent at Rs 3,313.30) and Cipla (down 2.90 per cent at Rs 519.65).
(Porisma P. Gogoi and Rohit Vaid can be contacted at porisma.g@ians.in and rohit.v@ians.in)