WEEKLY?MARKET?REVIEW
The positive sentiment on India triggered by global ratings agency Moody’s and the central bank’s dovish language on the economy’s prospects buoyed the markets for the second week, lifting a key index by 2.2 per cent in the trade ended Friday. Analysts expect the bull run to continue next week as well, beginning Monday, with the markets likely to respond positively to fresh official data on India’s factory output that indicated the steepest growth yet in nine months at 5 per cent.
The data had come after the closing bell Friday.
“The markets are expected to be in the positive territory due to the slew of data, ratings and guidance, which show continued growth in the Indian economy,” said Dipen Shah, head of private client group research, Kotak Securities.
“The rally of over 600 points last week was due to the relief on the US Fed front, the expectations of further rate cut by the central bank and government’s fast pace on the reforms front,” Shah told IANS.
Moody’s revised India’s sovereign ratings outlook to “positive” from “stable.” Another ratings agency – Fitch – also reaffirmed its stable outlook on India.
The think-tank of the rich nations, the Organisation for Economic Cooperation and Development (OECD), also endorsed India’s economic expansion projections.
India’s factory output also mirrored the positive sentiment by showing an expansion of 5 per cent in February over a 2.6 per cent rise in January.
Future rate cut hint
According to Devendra Nevgi, chief executive of ZyFin Advisors, the RBI’s language in its outlook has strongly signaled future rate cuts depending on the bank’s ability to pass on the benefits to consumer.
“The markets were pleased by a dovish language used by the RBI. On the other hand the RBI has also clearly stated that any further rate cuts will depend on the economic data, and the bank’s ability to pass on the previous interest rate benefit to consumers,” Nevgi told IANS.
“The gains during the previous week were made after the markets factored in that the fourth quarter results would be subdued. Low crude oil and current data on inflation also buoyed the markets,” he added.
However, Gaurang Shah, vice president of Geojit BNP Paribas, said, “Our sense is that from now on one can expect some consolidation in the market keeping in mind the Q4 earnings season which will kick off very soon and the markets will take directional call from thereon depending on which sectors do well and don’t in terms of earnings visibility.”
Analysts pointed out that apart from the healthy industrial output figures for February, the expectations from the season’s earnings and the March CPI (consumer price index) data to be released Monday will also be the key triggers for the coming week.
The CPI-based inflation rose to 5.37 per cent for February, from 5.19 per cent in January and 4.28 per cent in December 2014.
The benchmark, 30-scrip S&P Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) gained 619 points or 2.19 percent during the week ended April 10 to end at 28,879.38 points, against the previous week’s close at 28,879.38 points.
Most sector indices of the BSE closed positive with realty, FMCG (fast moving consumer goods) and metals gaining more than 5 per cent each.
During the week before, the barometer index rose 801.55 points, or 2.91 per cent.
Similarly, at the National Stock Exchange (NSE), the broader, 50-share CNX Nifty made gains of 2.26 per cent or 194.1 points.
The Sensex had ended the truncated weekly trade ended April 1 at 28,260.14 points, from a close of 27,458.64 points on March 27.
On Friday, the Sensex opened at 28,889.27 points and ended the day’s trade at 28,879.38 points, down 5.83 points or 0.02 percent from the previous day’s close at 28,885.21 points.
The gainers
The major Sensex gainers on Friday were, Sesa Sterlite, up 3.65 per cent at Rs 201.70; State Bank of India (SBI), up 1.85 per cent at Rs 285.65; Dr.Reddy’s Lab, up 1.62 per cent at Rs 3,800.15; Bharti Airtel, up 1.12 per cent at Rs 411.35; and Infosys, up 0.99 per cent at Rs 2,233.30.
The Losers
The losers were, Cipla, down 2.66 per cent at Rs 700.05; HDFC Bank, down 1.53 per cent at Rs 1,040; Hindalco Inds, down 1.46 per cent at Rs 137.90; HDFC, down 1.12 per cent at Rs 1,290.30; and Hero MotoCorp, down 0.99 per cent at Rs 2,584.25.
Global markets too remained firm during the week under review with the DJ (Dow Jones), FTSE (Financial Times Stock Exchange), and Nikkei gaining 1.1 per cent, 3.1 per cent and 2.4 per cent respectively.
