Domestic equity markets registered their biggest weekly gains in more than two months after the US Federal Reserve raised interest rates without any disruptions to global markets. Other factors such as rupee appreciation and value buying at lower levels also supported market sentiments for the week ended December 18. This week, the BSE Sensex and NSE Nifty gained 1.90 per cent and 1.99 per cent, respectively.
For the week ended December 18, BSE Sensex advanced 474.79 points to 25,519.22, while NSE Nifty gained 151.50 points to 7.761.95.
All the sectoral indices on BSE ended in green this week. The BSE Metal index surged the most — 4.07 per cent, followed by BSE Power index (up 3.39 per cent), BSE Realty index (up 3.06 per cent), BSE Healthcare index (2.36 per cent) and BSE Oil & Gas index (up 2.32 per cent).
Gaurav Jain, director, Hem Securities, said, “Improved domestic economic numbers i.e. monthly IIP, WPI, dovish comment from FOMC head Janet Yellen post a rate hike, positive global cues, appreciation of rupee against dollar, short covering and lower level buying helped indices register gains of nearly 2 per cent in the week gone by.”
Adani Ports (up 8.25 per cent), Tata Steel (up 6.25 per cent), Power Grid (up 5.82 per cent), YES Bank (up 5.80 per cent) and Kotak Mahindra Bank (up 5.65 per cent) jumped the most in the Nifty pack. Share price of Tech Mahindra, Wipro and Axis Bank slipped 2.56 per cent, 2.33 per cent and 1.77 per cent, respectively, during the week.
According to the website of NSDL, foreign institutional investors or foreign portfolio investors remained net sellers in the equity market segment as they sold shares of worth Rs 657.36 crore in the week.
Rupee appreciated 0.54 per cent during the week. It moved to 66.42 on December 18 from 66.78 on December 11.
This week, data released on Dec 14 showed that CPI based inflation advanced to 5.41 per cent, higher than CPI inflation of 5 per cent in October 2015 and 3.27 per cent in November last year. WPI data came in at -1.99 per cent in November vs -3.81 per cent.
Among major events, government imposed anti-dumping duty on stainless steel imports to protect the domestic industry from cheap imports. India’s trade data showed that exports fell for the twelfth month to 24 per cent to $20 bn in November, compared with $26.4 bn a year earlier and imports fell 30.3 per cent to $29.7 bn from $42.7 bn a year ago.
US doubled the visa cost to $4,000 per applicant for H1-B and other categories of visas causing substantive cost hardships to the Indian IT industry. The move to hike fee for H1-B and L1 visa could cost IT firms an additional $400 million per annum.
In the move to reduce pollution in New Delhi, the Supreme Court banned the registration of diesel powered engines above specified levels in the private cars and brought in restrictions for entry of diesel vehicles in the city limits rattling the entire auto industry and in particular companies heavily into diesel powered vehicles. Many companies will now have to rework their strategies.
Trading sentiments will be affected on Monday due to rising concerns over the passage of GST. In an all-party meeting convened by Rajya Sabha Chairman Hamid Ansari failed on Friday to bring a consensus on the passage of the GST bill, but members of the Upper House decided to pass six other pending bills in the remaining period of three days of the Winter Session.
Dipen Shah, senior vice-president and head of private client group research, Kotak Securities, said, “The probability of the GST Bill getting passed in the current session of Parliament looks low and markets will now look out for reforms on the executive side. Markets will also await management commentaries on whether the reform initiatives of the Government have percolated to the ground level. That will be an important trigger for the markets to sustain and move higher from the current levels.”
For the further movement, global cues, interest of foreign portfolio investors, developments in winter session of the parliament for the remaining days, trend in commodity prices globally and rupee-dollar movement will dictate trend on the bourses. “Indices may seem to stay volatile with negative tone,” said Jain.
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