Markets sailed to hit new record highs of 31K on strong buying, thus logging a continous third consecutive weekly gains, while the broader Nifty touched 9,600-level for first time ever during the week. The eventful week saw the market gaining three out of five trading session, loomed by derivative expiry week amid grim global situation due deadly terrorist attack in UK, Moody’s downgrade of China, release of US Federal Reserve minutes and fresh Indo-Pak tension after Army fire Assault in LOC, stoked nervousness.
However, key index witnessed biggest single day-gain over two months on day of derivative expiry on shortcovering gains as the US Fed indicated in its minutes that it will wait for more data for the rate hike. Finally, the market commended the weekend with steller rally on the third anniversary of the Modi government, as shares zoomed lauding the political stability, economic reforms, radical tax haul including implementation of GST and clearing the infrastructure logjam, resulting prospects of good corporate earnings, FII inflows amid strong rupee sentiment.
The sensex resumed the week higher at 30,638.88 and spiked to all-time intra-week high of 31,074.07 and low of 30,247.60 before ending the week at 31,028.21, showing a sharp gain of 563.29 points or 1.85 per cent. It has gained by 1,169.41 points or 3.92 per cent in three weeks. The NSE 50-share Nifty also rose by 167.20 points or 1.77 per cent to close the week at new record peak at 9,595.10 after hitting an all- time high of 9,604.90 for the first time ever. The Nifty has also gained by 309.80 points or 3.34 per cent in three weeks. Buying was led by key FMCG, Auto, IT, Bankex, Metal, Teck, Capital Goods, Oil&Gas sectors, While HealthCare, Realty, Power, PSUs, Power witnessed profit-booking. The secondline shares of midcap and smallcap companies also saw losses.
Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) bought shares worth Rs 1,402.62 crore during the week, as per Sebi’s record including the provisional figure of May 26. In the broader market, the S&P BSE Mid-Cap index fell 124.10 points or 0.85 per cent to settle at 14,519.90. The S&P BSE Small-Cap index fell 140.81 points or 0.92 per cent to settle at 15,086.26. Both these indices underperformed the Sensex. Among sectoral and industry indices, FMCG rose by 4.04 per cent followed by auto 2.89 per cent, IT 2.79 per cent, bankex 2.46 per cnt, metal 1.85 per cent, teck 1.84 per cent, capital goods 1.28 per cent and oil&gas 1.28 per cent. However, healthcare fell by 8.53 per cent followed by realty 3.27 per cent, power 2.37 per cent, and consumer durables 0.50 per cent.
Among the 30-share Sensex pack, 19 stocks rose and remaining 11 stocks fell during the week. Tata Motors gained 8.53 per cent. after the company reported better than expected Q4 results. Tata Motors’ consolidated net profit fell 16.79 per cent to Rs 4336 crore on 2.86 per cent fall in revenues to Rs 77272 crore in Q4 March 2017 over Q4 March 2016. Consolidated profit and revenue in Q4 was lower due to translation impact from Pound to Indian Rupee. Consolidated profit before tax shed 12.26 per cent to Rs 5166 crore in Q4 March 2017 over Q4 March 2016. This broadly reflects strong retail sales in Jaguar Land Rover business on continued strong demand for the product and also higher wholesale volumes partially offset by overall higher marketing expenses and higher depreciation and amortization, company said.
It was followed by ITC 7.96 per cent, Tata Steel 4.58 per cent, ICICI Bank 4.74 per cent, Maruti 4.21 per cent, HDFC Bank 4.21 per cent, Infosys 4.00 per cent, Wipro 3.77 per cent, L&T 3.66 per cent and HUL 3.29 per cent. While, Pharma major Lupin lost 15.44 per cent after consolidated net profit fell 49.16 per cent to Rs 380.21 crore on 1.33 per cent growth in total revenue from operations to Rs 4253.30 crore in Q4 March 2017 over Q4 March 2016. It was followed by Sun Pharma 12.86 per cent, Cipla 12.75 per cent, Dr Reddy 9.20 per cent, SBI 6.39 per cent, Bajaj Auto 5.67 per cent, Coal India 3.12 per cent and ONGC 2.33 per cent.
The total turnover during the week on BSE fell to Rs 20,043.27 crore from Rs 23,712.19, while NSE rose to Rs 1,39,727.20 as against Rs 1,30,929.07 crs last weekend.
Bullion: Riding on a firm trend overseas and increased buying by jewellers at domestic market, gold prices extended gains for the second straight week at the bullion market during the week. Traders said sentiment remained firm on the back of positive global cues as political uncertainty led investors to shun riskier assets in favour of bullion, increased buying by local jewellers, mainly attributed to the rise in the precious metal’s prices. The yellow-metal gained 2.76 per cent or Rs 780, while, white-metal silver too gained 4.49 per cent or Rs 1,750 in two-weeks.
Elsewhere, silver also rebounded sharply to close above the significant Rs 40,000 mark due to heavy speculative buying coupled with higher industrial demand. In worldwide trade, Gold closed at its highest level of the month, lifting prices for a third week in a row as a fresh round of geopolitical jitters offset expectations for higher US interest rates, which would otherwise be bearish for gold prices.
Investors were watching North Korea, this weekend’s Group of Seven meeting, the coming UK elections, and developments surrounding the Trump administration—all helping to boost gold’s appeal as a hedge against uncertainty. Gold is used as an alternative investment during times of political and financial uncertainty. Gold posted a gain of about 1.2 per cent for the week, they’re third weekly advance in a row, while silver was up around 3.1 per cent for the week.
In New York Comex trade, gold for June delivery shot-up to settle at USD 1,268.10 an ounce as compared to last weekend’s close of USD 1,253.60 and July silver contract rose to USD 17.323 an ounce from USD 16.796 earlier. On the domestic front, standard gold (99.5 purity) commenced lower at Rs 28,630 per 10 grams, from last Friday’s closing level of Rs 28,635 and later surged to a high of Rs 28,895 before closing at Rs 28,835, showing a rise of Rs 200 per 10 grams, or 0.70 per cent.
Similarly, pure gold (99.9 purity) also opened lower at Rs 28,780 per 10 grams, from last Friday’s closing level of Rs 28,785 and later climbed to Rs 29,045 before finishing at Rs 28,985, revealing a gain of Rs 200 per 10 grams, or 0.69 per cent. Silver ready (.999 fineness) opened positive at Rs 39,565 per kilo from its previous weekend level of Rs 39,380, later rising to a high of Rs 40,260, before ending at Rs 40,235, registering a surge of Rs 855 per kilo, or 2.17 per cent.
Oils and Oilseeds: Edible and non-edible oils slipped, while, linseed ended stable at the oils & oilseeds wholesale market week under review. Groundnut oil continued its downtrend trend for the fourth straight session following reduced demand from stockists and retailers amid fresh arrivals from producing regions. Refined palmolein slipped owing to subdued retail buying support.
Castorseeds bold and castor oil commercial fell due lower demand from shippers and soap industrial units. Linseed oil ruled stable in the absence of any large scale buying from paint and allied industries. In the edible segment, groundnut oil opened stable at Rs 1,020 and later dipped to close at Rs 970 as compared to last Saturday’s closing level of Rs 1,020, revealing a loss of Rs 50 per 10kg. Refined palmolein resumed stable at Rs 568 and later declined to finish at Rs 558 as against previous weekend’s level of Rs 568, showing a loss of Rs 10 per 10kg.
Turning to non-edible section, castorseeds bold commenced lower at Rs 4,850 and moved down to end at Rs 4,825 as compared to last weekends’ level to Rs 4,875, showing a loss of Rs 50 per 100kg. Similarly, castoroil commercial commenced lower at Rs 1,000 and fell further to close Rs 995 as against previous weekends’s level of Rs 1,005, a fall of Rs 10 per 10kg. Linseed oil prices opened and closed stable at its previous weekends’ level of Rs 780 per 10kg.
Forex: The rupee staged a striking bounce-back from a near one-month low against US currency in a volatility marked trading and ended at 64.44 on bouts of dollar selling by banks and exporters even as stocks climbed to new milestones. After some initial setbacks, the home currency finally settled with a good gain of 20 paise. The incredible bull run at the Indian equities markets that soared to life highs as the Modi government completed three years in power further supported the buoyant mood of currency traders.
Though, heightened uncertainty over US President Trump’s policies continued to weigh heavily on the sentiments of market participants across the globe. A weaker greenback overseas along with abundant capital inflow and unwinding of long positions by traders and banks predominantly helped rupee recovery. The home currency suffered a knee-jerk reaction – plunging to hit a seven-week low of 64.90 on Monday before recovering in the backdrop of escalating tensions between India and Pakistan.
Overall forex sentiment turned positive after two-day US Federal Reserve policy meet signaled a more cautious approach to future rate hikes and also reiterated the data-dependency of such a move. The local unit opened firmly higher at 64.52 against last Friday’s close of 64.64 at the Interbank Foreign Exchange (forex) market. But then immediately succumbed to heavy selling on the back of strong month-end dollar demand from importers amid global volatility.
After touching a low of 64.96, the home unit rebounded sharply toward the tail-end trade to reclaim fresh high of 64.42 before ending at 64.44, showing a handsome gain of 20 paise, or 0.31 per cent. Foreign funds remained bullish on Indian equities and infused a net amount of USD 259.74 million, according to provisional figures by stock exchanges. Additionally, overseas investors have pumped in more than USD 2 billion so far in the country’s capital market this month, helped by stable outlook for the rupee.
In worldwide trade, the re-emergence of economic fundamentals largely helped the US Dollar find a lifeline this week after US first-quarter GDP growth revised up to 1.2 per cent in official figures on Friday. The currency had been battered by intense political instability fears as the Trump administration looked increasingly mired in a scandal about senior members’ contact with Russian officials. The dollar index — a measure of the US currency against a basket of six trade-weighted peers bounced back from its new 2017 low of 97.00 to end at 97.33.
In the meantime, country’s forex reserves rose by a whopping USD 4.036 billion to life-time high of USD 379.310 billion in the week ended May 19. In a major policy initiative the union cabinet on Wednesday scrapped the 25-year old foreign investment advisory body FIPB as it looks to attract more FDI by providing quick approvals under a single-window clearance system. The RBI fixed the reference rate for the USD at Rs 64.5945 and Euro at Rs 72.3329 against preceding week’s level of Rs 64.9906 and Rs 72.2955 respectively.
In cross-currency trade Indian unit displayed a mixed trend during the week. The rupee bounced back sharply against the British pound, surging by a whopping 127 paise to end at 82.82 from last Friday’s level of 84.09 per pound. The pound took a big hit, tumbling to its lowest level in two weeks after a poll showed PM Theresa May’s Conservatives’ lead shrinking two weeks ahead of national elections on June 8. However, the local currency softened further against the Japanese Yen to settle at 58.05 per 100 yens as compared to 58.03, while it finished virtually stable against the Euro at 72.21.
In the forward market, premium for dollar took a sharp slide following continued receivings from exporters. The benchmark six-month forward dollar premium payable in October dropped to 127-128 paise from 138.50-140.50 paise and the far-forward contract maturing in April 2018 also drifted to 274-275 paise from 290-292 paise last Friday. In global commodity trade, crude prices collapsed – leading to the biggest daily plunge since the start of 2016 to end below the key psychological USD 50/barrel level after Saudi hinted that there is no need for deeper cuts. Concerns also remained that OPEC-led production cuts will support a further rise in output from the United States, where producers can operate at much lower costs.