Markets snap 2-week losing streak on passage of Bankruptcy Bill

Both the indices, Sensex and Nifty, snapped its 2-week losing streak on fresh buying mainly in banking sector buoyed by the passage of bankruptcy bill by the government in the Parliament despite rise in inflation figure. IT, Tech, Capital Goods and FMCG sectors also firmed up on good buying enquiries.

Domestic shares logged their first weekly gain in the third week on the back of quarterly earnings, which were so far in line with expectations, as Sensex rose 261.07 points or 1.03 per cent and Nifty climbed 81.45 points or 1.05 per cent in five days.

The Sensex had dropped 609.64 points or 2.36 per cent and the NSE Nifty 165.85 points or 2.10 per cent in previous two weeks.

The BSE Sensex logged its biggest single-day gain in nearly four weeks, surging 460 points on Monday on a flurry of buying activity after global shares rallied on hopes that the US Fed Reserve will remain cautious on interest rate hikes.

Equities took a beating of 300 points on the last day to fall to a one-week low as investors saw odds of an early rate cut receding after inflation hardened in April amid fears that Sebi’s move to tighten P-Note norms would hit foreign fund inflows.

In a double whammy, government data showed that industrial production plunged to 0.1 per cent in March, while retail inflation jumped to 5.39 per cent in April.

“Weak inflation numbers caused speculation that the Reserve Bank would hold off on cutting interest rates at its policy review next month, thus dampening investor sentiment,” said Shreyash Devalkar, Fund Manager  Equities, BNP Paribas MF.

Market also affected on fears that equity inflows would take a hit after India’s move to impose capital gains tax on investment through Mauritius.

In the broader market, the BSE Mid-Cap index rose by 190.79 points or 1.74 per cent to settle at 11,156.07 and the BSE Small-Cap index rose by 213.99 points or 1.96 per cent to end at 11,113.30. Both these indices outperformed the Sensex.

Among the S&P, BSE sector and industry indices, Bankex rose 2.70 per cent, followed by Tech 1.71 per cent, Capital Goods 1.61 per cent, IT 1.57 per cent, FMCG 1.45 per cent, Consumer Durables 0.94 per cent, Healthcare 0.45 per cent and Realty 0.33 per cent.

However, Metal declined by 2.21 per cent followed by Oil & Gas 0.72 per cent and Auto by 0.27 per cent.

From a 30-share Sensex pack, 16 stocks rose, while 14 ended lower during the week.

Major gainers were, Axis Bank (6.35 per cent), Asian Paints (6.09 per cent), ICICI Bank (3.85 per cent), Bajaj Auto (3.43 per cent), TCS (2.22 per cent), L&T (2.15 per cent), Infosys (2.14 per cent), HDFC Bank  (1.92 per cent), Dr Reddy (1.53 per cent), Hero Motoco (1.52 per cent) and Wipro (1.31 per cent).

Adani Ports fell by 3.36 per cent followed by BHEL 3.20 per cent, HUL 2.45 per cent, Tata Motors 2.18 per cent, ONGC 1.99 per cent, Tata Steel 1.96 per cent, M&M 1.22 per cent, Gail 1.22 per cent, Sun Pharma 1.13 per cent and Cipla 1.02 per cent.

The total turnover at BSE and NSE rose to Rs 12,550.76 crore and Rs 85,455.02 crore, respectively, as against last weekend’s level of Rs 11,976.50 crore and Rs 78,673.03 crore.

The rupee resumed slightly higher at 66.52 per dollar as against the last weekend’s level of 66.54 at the Interbank Foreign Exchange market and firmed up further to 66.39 per dollar on initial selling of dollars by banks and exporters on the back of initial rise in domestic equities.

However, it dropped afterwards to 66.84 per dollar on renewed dollar demand from banks and importers in view of fall in equity market before closing the week at 66.77 per dollar, showing a loss of 23 paise or 0.35 per cent. It has lost 44 paise or 0.67 per cent in two weeks.

The domestic currency hovered in a range of 66.39 per dollar and 66.84 per dollar during the week.

In the global market, the dollar traded moderately higher against the euro and the yen, after hawkish comments from several Federal Reserve officials.

The US currency fell into a tailspin recently, touching an 18-month low of 105.55 on May 3 following the Bank of Japan’s inaction.

The market benchmark Sensex fell by 301 points on the last day on speculation that the Reserve Bank would restrain itself from cutting rates during its policy review next month following rise in inflation and dip in industrial output growth.

The rupee-dollar value also affected on heavy dollar demand on concerns that future equity inflows into India would be hit in the aftermath of amendments to the bilateral India-Mauritius tax treaty.