A steady recovery in the rupee and easing of geopolitical concerns around Syria helped Indian equities post their third successive weekly gain. In addition, better-than-expected economic data in India, and globally, helped boost sentiment.
Despite ending weak for the last two consecutive sessions, the Sensex rose 2.4%, or nearly 463 points, this week to settle at 19,732.76. The Nifty gained 3%, or 170 points, to end the week at 5,850.6, led by recovery in some of the beaten-down sectors like real estate, banks, automobiles, capital goods and power.
Gains in six counters ? Axis Bank (11.3%), L&T (10.9%), Mahindra & Mahindra (7.9%), Sun Pharma (6.7%), HDFC (6.2%) and ITC (4.7%) ? contributed 96.532 points, or nearly 57%, to Nifty?s weekly gain.
More importantly, the gains were not restricted to frontline stocks alone. Broader markets outperformed the benchmark indices for the first time in nearly two months. The BSE Midcap and Smallcap indices gained 3.3% and 3.1%, respectively, on a week-on-week basis. A sharp recovery in the rupee prompted traders to cover short positions and institutional investors, especially overseas funds, to turn buyers seeking bargains in an oversold market.
Data show FIIs net bought around $640 million worth of Indian shares during the four-session week, taking their month-to-date tally to $982 million. In contrast, DIIs sold R2,331 crore (around $366 million) of Indian equities this week. FIIs have sold around $3.5 billion of Indian equities since the beginning of June, after having pumped in a record $15.1 billion during the first five months of the current calendar.
Rally in global indices ? helped by better-than-expected economic data in China and other developed economies ? also supported the rally. Major Asian indices ? Nikkei, Hang Seng, Shanghai Composite, Taiwan TAIEX, Kospi, FTSE Straits Times ? all gained in the range of 1.5% to 4.5% during the week.
Analysts said the speed at which the Syrian issue is being resolved augured well for Indian equities. Developments in West Asia hold the key to crude oil prices that have a direct impact on India?s current account deficit. Major European and US indices have gained 1.5-4% this week. These indices were still trading at the time this report went to print.
Asian, European, and US markets surged and remained buoyed after Chinese industrial production numbers showed stronger-than-expected growth in the month of August. China?s industrial output rose 10.4% y-o-y ? as against analysts expectations of to 9.5% increase ? indicated the world?s second-largest economy may be on the mend.
Back home, BSE Realty was the biggest gainer, with the index surging 8.9% from the previous week. BSE Capital Goods rose 8%, while BSE Auto gained 5%, BSE Power rose 5.4% and CNX Bank Nifty gained 2.2% from last week.
Market breadth was strong this week, with the list of gainers largely outpacing the losers. As many as 43 of the Nifty-50 stocks gained on a week-on-week basis. Top gainers included Punjab National Bank (+14.9%), DLF (+13.7%), Axis Bank (+11.3%), L&T (+10.9%), Tata Power (+10.7%), Bank of Baroda (+8.9%), ACC (+8.5%) and UltraTech Cement (+7.5%).
