Indian equities rally on strong rupee, foreign fund inflows
After a week of bear chasing, continuous inflow of funds and a strong rupee pulled the Indian equity markets from lower levels to close the trade week with marginal gains.
The key indices, which traded with volatility during the week ended Friday on the back of March 2017 derivatives expiry, closed with gains of over half-a-per cent each.
Investors` sentiments were buoyed on the passage of the Goods and Services Tax Bill 2017 -- a major tax reform in the country -- and healthy roll-overs seen on the expiry of March 2017 series contracts in the futures and options (F&O) segment to April 2017 series.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 199.10 points or 0.68% to close at 29,620.50 points, while the NSE Nifty closed at 9,173.75 points -- up 65.75 points or 0.72%.
"Markets resumed their intermediate uptrend this week after falling last week. The Nifty ended with week-on-week gains of 0.72%. Market breadth was positive in three out of the five trading sessions of the week," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.
"Sectorally, the top gainers were the realty, power, banking and capital goods indices. The top losers were the IT, metals and pharma indices."
According to Vijay Singhania, founder and Director of brokerage firm Trade Smart Online, negative global cues and unwinding of open positions on expiry of March derivative series saw markets trading range-bound and finally end the week with small gains.
"Despite weakness in the global markets, sentiments buoyed towards the end (of the week) as Lok Sabha cleared four bills related to the Goods and Services Tax (GST), one of the biggest reforms," Singhania asserted.
"The global markets were also weak as US President Donald Trump suffered a major setback when he was forced to call off the vote on the healthcare bill as his administration failed to muster support from its own conservative Republican Party members," he added.
Market analysts pointed out that the Indian equity markets witnessed smart recovery from lower levels tracking bearish USD/INR futures prices and short covering.
"The rupee strengthened to a 17-month high against the dollar, which also helped the recovery in the equity markets. Good money inflow was seen from the FIIs (foreign institutional investors) in the current week which helped the markets to recover from lower levels," said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.
The Indian rupee got strengthened by 56 paise to 64.85 against a US dollar from last week`s close of 65.41 to a greenback.
In terms of investments, provisional figures from the stock exchanges showed that FIIs purchased stocks worth Rs 7,226.29 crore during the week, while domestic institutional investors (DIIs) bought scrip worth Rs 4,245.98 crore.
Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs 9,058.41 crore, or $1.39 billion, during March 27-31.
"Following a massive victory of the ruling National Democratic Alliance in the recent state assembly elections, foreign investors continued to invest in Indian stocks and bonds. Interestingly, this has seen the Indian rupee on course for its best first quarter performance since 1975," Singhania explained.
"The currency, Asia`s best performer this month, has rallied 4.8% since December 31, 2016. The (US) Federal Reserve`s dovish tone on future rate hikes led to a weaker dollar, improved the allure of assets in emerging markets, and aided the strengthening rupee."
Commenting on sector-specific movement, Rakesh Tarway, Head of Research, Reliance Securities, said: "Amongst sectors, PSU Banks gained highest by 5% for the week. We saw flat performance in other major sectors barring pharma, which corrected by 1.5% during the week."
"The CNX mid-cap and small-cap indices ended flat with gains of around 1.5% and one% respectively for the week," he added.
The top weekly Sensex gainers were: State Bank of India (SBI) (up 6% at Rs 292.60), Adani Ports (up 5.23% at Rs 340), Bharti Airtel (up 2.81% at Rs 349.95), HDFC (up 2.60% at Rs 1,500) and Reliance Industries (up 2.57% at Rs 1,319.20).
The losers were: Hero MotoCorp (down 4.49% at Rs 3,225), ONGC (down 3.62% at Rs 185.05), Lupin (down 2.61% at Rs 1,444.80), Sun Pharma (down 2.22% at Rs 687.70), and Tata Steel (down 2.14% at Rs 482.65).