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Indian markets post first weekly decline in 4 weeks

Riding high on better-than-expected inflation numbers and the reforms push by the government, Indian equities ended their five-day losing streak, led by smart gains in metal, banking and realty stocks.

Riding high on better-than-expected inflation numbers and the reforms push by the government, Indian equities ended their five-day losing streak, led by smart gains in metal, banking and realty stocks.

Amid a volatile session, the Sensex advanced 87.99 points, or 0.46%, on Friday to close the day at 19,317.25, while the Nifty settled at 28.1 points, or 0.484%, higher to end at 5,879.6 after government data showed November inflation rate had eased to 7.24% against analysts expectation of 7.6%. Inflation rate stood at 7.45% in October.

Market experts saod increased hopes of a CRR cut pushed banking and other interest rate-sensitive stocks higher on Friday even as the Street expects the RBI to maintain status quo on policy rates in its mid-quarter policy review next week. A 25-bps cut in CRR would infuse around R17,00-18,000 crore of liquidity into the banking system.

FIIs continued with their buying spree in Indian equities on hopes of more reforms from the government and a cut in interest rates by RBI. According to provisional numbers on the BSE, FII net bought $105.42 million worth of Indian equities on Friday, taking the YTD inflows to over $22 billion.

On a weekly basis, mild profit-booking ahead of the holiday season saw Indian equities post their first decline in four weeks despite important Bills like FDI in retail getting the nod in Parliament.

However, the losses were limited by gains in international equity markets that have advanced nearly 2%, tracking positive momentum and data points in the US and Europe, said analysts.

Experts said markets are in a consolidation phase ahead of the big events such as the RBI mid-term policy review and the Winter session of Parliament next week.

Barring the BSE Auto, BSE Bankex and BSE Healthcare indices, all major indices posted weekly declines. The Consumer Durables index was the biggest loser, falling 4.65% week-on-week. BSE Power, BSE FMCG, BSE Realty and BSE IT declined in the range of 1-4%. BSE Auto was the top gainer, rising 2.07%. Shares of Bajaj Auto touched a life-time high of R2,106 as the stock gained over 7% this week. Tata Motors gained 3.6% this week.

Most Asian markets edged higher during the week, moving up anywhere between 2-5%. The Shanghai Composite index gained the most at 4.3% during the week, followed by Nikkei 225, which rose 2.2%, and Hang Seng and Kospi, which rose 1.9% each.

On Friday, BSE Bankex closed the day at 14,170.74, up 84.51 points or 0.6%, while the BSE Realty index gained 18.68 points or 0.91% to settle at 2,065.22. Metals stocks were the biggest gainers on Friday, with the BSE Metals index advancing 159.85 points or 1.55% to end at 10,491.10. Sesa Goa gained the most among the frontline stocks, rising 3.7% from Thursday’s close. Hindalco, Sterlite Industries, Jindal Steel and Tata Steel gained 2-4%.

?The international metal market is showing signs of recovery. For instance, iron ore prices in China have risen nearly 40% from their September lows, while inventories have declined around 20-25%. All of these are lending support to metal stocks,? said Rajesh Iyer, head, products and research, Kotak Wealth Management. Iyer said that the market is reflecting new found optimism on reforms.

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First published on: 15-12-2012 at 01:13 IST
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