Benchmark indices ended flat-to-positive in a holiday-shortened week after gaining more than 7% since the week ended October 17 as investors refrained from placing big bets ahead of key economic data.
The street is keenly awaiting the monthly industrial output and retail inflation (CPI) data on Wednesday, and the wholesale price inflation (WPI) numbers on Friday.
Sensex ended the week higher by 2.8 points, or 0.01%, from the previous week at 27,868.63. The 30-share gauge touched the psychological mark of 28,000 on Wednesday. The 50-share Nifty ended higher by 0.17% (14.8 points) at 8,337. There were two trading holidays in the week — Muharram and Guru Nanak Jayanti.
Broader markets outperformed the benchmark indices, given the valuations comfort. The BSE Mid-Cap and Small-Cap indices each rose 1.7% from the previous week. The Mid-Cap index is still below its all-time highs of early 2008 and trades at 13.5 times earnings compared to about 19 times for the Sensex.
Overseas funds remained net buyers of Indian equities for the sixth consecutive session on Friday. Foreign portfolio investors (FPIs) purchased about $418.37 million of shares in the cash segment on Friday — the biggest single-day purchase since July 3. FPIs have now purchased close to $1.5 billion in the last six sessions.
Foreign funds, who have been driving the Indian markets for over a decade, have invested close to $14.8 billion so far this year — the most among eight Asian markets tracked by Bloomberg. The purchases have helped the Sensex climb 32% this year, the best performance among the world’s 40 biggest markets.
Real estate and pharmaceutical stocks were in focus this week. The BSE Realty index was the top performer with 5.7% gains. The BSE Healthcare index advanced 3.7% from the previous week.
Dr Reddy’s Laboratories rallied 4.42% — the biggest single-day gain since July this year — to a record as the company received USFDA approval for generic version of antiviral drug Valcyte. Dr Reddy’s has gained more than 12% in the last five sessions.
Realty major DLF surged 6.3% after an appeals court granted interim relief to the Gurgaon-based company to redeem mutual funds worth R1,800 crore for repayment of loans.
Hero MotoCorp declined 2.6% on Friday, taking this week’s loss to 5.8%, after PE firm Bain Capital was said to have sold shares in the motorcycle maker. Mahindra & Mahindra fell more than 1%. HDFC Bank declined 1.5%, while SBI slid 1.4%.
Ashok Leyland gained 1.5% after the company’s second-quarter profit of R121 crore exceeded the median analyst estimate of R20.5 crore.
Sixteen of the 20 Sensex members that have declared results so far have beaten or matched estimates. Earnings of companies on the gauge are likely to expand 23% over the next 12 months vs 15% for companies on the MSCI Emerging Markets Index, data compiled by Bloomberg show.