Good Macroeconomic Data, Hopes Of Low-Interest Rates Fuel IndicesExpectation of lower interest rates with further liquidity infusion by the Reserve Bank of India (RBI) under its new chief, covering with healthy macroeconomic data points, drove the key equity indices forward. The domestic equity market opened on a dismal note, but a sharp bounce back after the five Assembly election results drove the S&P BSE Sensex and the NSE Nifty50 to their fourth straight session of gains. “While the resignation (of RBI Governor Urjit Patel) took the market by surprise, leading to points over the independence of RBI as an institution, the quick announcement of the appointment of the new Governor (Shaktikanta Das) has helped allay these fears,” said Shibani Kurian, Senior Vice President, Head of Equity Research, Kotak Mahindra Asset Management.
The new Governor, former senior bureaucrat Shaktikanta Das, is seen close to the current dispensation at the Centre.
A different key theme of the week was normalization of Brent Crude oil to around $60 after a short-term upward mobility due to Organisation of the Petroleum Exporting Countries (OPEC) production cut announcement.
“Crude oil production cut by OPEC was below anticipated which had sparked a short-term volatility, but normalized subsequently. Also, US inventories have gone down this week,” Anuj Gupta, Deputy Vice President – Research, Commodities and Forex, Angel Broking, told IANS.
“We expect the (crude) prices will increase now as the actual effect of the production cut will commence showing from January.”
However, towards the end of the week, advances were capped across the globe as growth concerns grew after China, the world’s second-largest economy, showed slowing retail growth.
As a result, global equity markets ended the week on a negative note.
In terms of investments, foreign institutional investors (FIIs) were net sellers during the review as they off-loaded a total of Rs. 2,067.19 crore worth of shares, while domestic institutional investors (DIIs) sold scrips worth Rs. 153.21 crore, provisional data from the BSE showed.
As per the HDFC Securities’ Retail Research Head Deepak Jasani: “Technically, with the Nifty rallying higher for the fourth consecutive session, the bulls remain in control. Further upsides are likely in the coming week once the immediate resistances of 10,941 points are taken out.”
“Crucial helps to watch for any weakness are at 10,588 points.”
On a weekly basis, the top gainers on the BSE and the NSE were Yes Bank and Hero MotoCorp which gained over 8 percent each, followed by ONGC, SBI, Bharti Airtel and Mahindra and Mahindra, which gained in the range of 4 to 5 percent.
In contrast, HDFC lost 2.46 percent, the most during the week. It was followed by Kotak Mahindra Bank, Reliance Industries, Adani Ports and HDFC Bank.