BSE Sensex on upward trajectory, rallies to 5-wk closing high

Both bellwether indices BSE Sensex and CNX Nifty continued their north-bound journey for the third consecutive week, surging 634 points and 197 points, respectively, to log their 5-week closing highs on the back of a host of positive factors.

The market posted smart gains in three out of five alternate trading sessions of the week.

The markets kept their tempo after the government said it has contained the fiscal deficit at 4 per cent of GDP for 2014-15, bettering its own targets, while expectations of a rate cut by RBI following cooling inflation and slowing industrial growth amid forecast of a timely monsoon helped.

Buying was visible mainly across the board as 11 out of 12 sectoral indices finished with gains. IT, technology, healthcare, capital goods, refinery and banking segments took the lead in gains while only some metal shares ended with losses.

A smart rise in Sun Pharma, Dr Reddy’s Lab, Bajaj Auto, Hero MotoCorp, RIL, GAIL India, HDFC, HDFC Bank, Infosys, TCS, Wipro, L&T, HUL, Coal India and Tata Power mainly supported the upside.

The BSE 30-share Sensex opened higher at 27,416.97 and scaled the 28,000 mark to an intra-day high of 28,071.16, before registering a 5-week closing high of 27,957.50, a sharp gain of 633.50 points, or 2.31 per cent. It had last ended at 28,442.10 on April 17, 2015.

It has gained 946.19 points, or 3.50 per cent, in the straight three weeks.

Similarly, the broad-based 50-issue NSE Nifty moved in a range of 8,489.55 — 10 points shy of the 8,500 mark — and 8,271.95, before signing off at 8,458.95, a smart gain of 196.60 points, or 2.38 per cent.

It has gained 277.45 points, or 3.39 per cent, in the three straight weeks. It had last ended at 8,606.00 on April 17, 2015.

Buying was seen mainly in key stocks as second-line shares attracted less buying interest from retail investors and their indices underperformed the Sensex. The BSE Smallcap and the BSE Midcap rose 0.53 per cent and 1.51 per cent, respectively.

Fresh investments by foreign portfolio investors (FPIs) also buoyed market sentiment as they net bought shares worth Rs 230 crore, according to market regulator data.

On the overseas front, most Asian markets ended the week in the positive terrain on signs of fresh investment from Beijing amid a record close on the Wall Street during the week, with prospects of a Federal Reserve rate hike in June evaporating fast.

A strong rise in European markets after the European Central Bank (ECB) proposed that it may “frontload” its one trillion euro bond-buying slightly to account for lower market liquidity in high summer also gave the markets here some comfort.

Back home, next week, the last batch of quarterly earnings, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate the trend on the bourses.

The market may remain choppy as traders roll over positions in the futures and options segment from the near month May 2015 to June 2015 series. The May 2015 F&O contracts expire on Thursday, May 28, 2015.