Weekly Review: Sensex, Nifty gain over 1 per cent on value buying, global cues

After three consecutive weeks of downfall and a loss of nearly 7 per cent in this period, the domestic benchmark indices witnessed some buying at lower levels that helped BSE Sensex and NSE Nifty clock a gain of over 1 per cent during the week ended November 20. According to market experts, value buying at lower levels and upbeat global cues supported the market sentiment this week.

The BSE Sensex and NSE Nifty advanced 257.96 points and 94.30 points to 25,868.49 and 7,856.55, respectively, for the week ended November 20.

In the 50-share index, GAIL (India) surged 23.55 per cent in the week under review. The share price of the company jumped from Rs 282 on November 13 to Rs 348.40 on November 20. Vedanta (up 6.65 per cent), Ambuja Cements (up 5.06 per cent), Zee Entertainment (up 4.94 per cent) and Mahindra & Mahindra (up 4.88 per cent) remained among other major gainers in the index.

On the other hand, Axis Bank slid the most 5.10 per cent, followed by Infosys (down 4.52 per cent), Tata Power (down 2.34 per cent), Sun Pharma (down 1.96 per cent) and Hero MotoCorp (down 1.94 per cent) stood amond major losers.

Hitesh Agarwal, head research, Reliance Securities, said, “Having digested the Bihar state election outcome, the slowdown in September IIP and the uptick in CPI Inflation for October in recent weeks, investors opted to do some bottom-fishing at lower levels. Moreover, the strength witnessed in the Indian stock market was in tandem with the buying witnessed in equities across global markets.”

Gaurav Jain, director, Hem Securities, said, “Indian indices registered gains of about 1 per cent in the week gone by aided by hopes of some amendments on GST Bill, positive global cues, rise in crude prices, short covering, and lower level buying. However, continued selling pressure by foreign portfolio investors, Intensifying geopolitical worries in Europe and FOMC minutes indicating a rate hike by next month capped the gains.”

Sectorwise, the BSE Oil & Gas index and BSE FMCG index advanced 4.28 per cent and 2.81 per cent. The BSE Realty index and the BSE IT index slid 1.46 per cent and 1.11 per cent during the week under review.

In the week, government doled out relief to sugar cane farmers by providing them subsidy at the rate Rs 450 per tonne, interest rate subsidy scheme for exporters for five years to counter falling exports and clearing on the war footing stalled road projects worth Rs 35,000 crore. IPO of Cochin Shipyard and FPO for Coal India were also cleared.

Foreign institutional investors, or FIIs remained in the selling mode and sold stocks worth Rs 3,207 crore during the week.

Jimeet Modi, chief executive officer, SAMCO Securities, said, “Confidence is returning, markets are rising gradully on the back of continued pessimism. Government also seems to move ahead with its growth agenda, which will be positive for the market going forward.”

The government this week also offered a gift to 4.2 million central government employees and 5.2 million retirees in the form of 7th pay commission hikes up to 23 per cent, entailing Rs 73,000 crore outflow on the exchequer.

Kotak Institutional Equities in a research note said, “We expect automobiles (4W, in particular), consumer durables and real estate sectors to benefit from the largesse. Although current demand conditions are somewhat subdued in the sectors, the additional funds in the hands of central and state government employees should be a positive for volume growth of the two sectors.”

During the week, Indian rupee appreciated marginally 0.07 per cent to 66.09 on November 20. The currency was at 66.13 on November 13.

For upcoming trading sessions, Agarwal said, “In the absence of any domestic economic data point, the market is likely to largely follow its global peers. However, the November series F&O expiry coupled with the fact that it is a 4-day trading week, could induce some volatility in the market.”

With the Winter Session of the Parliament set to begin on November 26, investors will also keenly watch the fate of important bills like the Goods and Services Tax(GST).