The BSE Sensex and NSE Nifty ended the week on a positive note with a gain of over 1 per cent. During the week, the Reserve Bank of India cheered investors by reducing repo rate by 50 basis points to 6.75 per cent from 7.25 per cent earlier. However, the central bank kept the cash reserve ratio unchanged at 4 per cent of net demand and time liability (NDTL).
Sensex closed the week 357.45 points, or 1.38 per cent, up at 25863.50. Nifty gained 82.40 points, or 1.05 per cent, at 7950.90.
The broad dynamics across sectors looked lacklustre; banks notably lagging behind. Among the sectoral indices on the Bombay Stock Exchange, the BSE Consumer Durables index, BSE Realty index and BSE FMCG index gained 3.87 per cent, 3.23 per cent and 2.60 per cent, respectively, during September 24 and October 1. BSE Metal and BSE Bankex lost 0.90 per cent and 0.45 per cent, respectively, during the week.
In the 30-share Sensex pack, Dr Reddy’s Laboratories surged the most — 6.51 per cent to Rs 4,230.05 for the week ended October 1, followed by Lupin (up 5.91 per cent), HUL (up 5.91 per cent), Coal India (up 3.01 per cent) and Reliance Industries (up 2.91 per cent). On the other hand, share price of Vedanta declined 12.42 per cent to Rs 83.55 on October 1 from Rs 95.40 on September 24. Other stocks such as Axis Bank, Tata Motors and State Bank of India plunged 3.54 per cent, 2.19 per cent and 1.57 per cent, during the week.
Anand James, co-head technical research desk, Geojit BNP Paribas, said, “Now that the rate decision has been settled in market’s favour, the focus would be more on earnings play in the week ahead.”
Indian rupee appreciated around 0.82 per cent in the week under review. It jumped to 65.55 levels on October 1 from 66.09 on September 24.
Gaurav Jain, director, Hem Securities, said, “A sharp repo rate cut by the central bank was the key trigger for the rally in the Indian indices. Firm global markets, strengthening of rupee and renewed buying interest were some factors bolstering the sentiments of the street. However, US Federal Reserve chairman Janet Yellen speech which hinted possibilities of a rate hike at the end of the year capped the gains in the truncated week.” Domestic equity markets are closed on Friday on account of Gandhi Jayanti.
The month of September saw FIIs outflow of Rs 5,900 crore while domestic institutional investors investors counterbalanced with inflow of Rs 7,070 crore thus drastically reducing the selling pressure in the market.
On the economy front, the growth of eight core sectors slowed down to 2.6 per cent in August mainly due to contraction in steel output. The expansion in eight infrastructure sectors, which contribute about 38 per cent to the overall industrial production, was 5.9 per cent in the same month last year.
For the coming week, Jimeet Modi, CEO, SAMCO Securities, said, “Markets will watch the corporate scorecard. The mood of the market will remain buoyant in view of rate cuts and assurances from the government that they too will deliver in terms of reform agenda. Indian markets are slowly decoupling and turning out to be resilient, even the rupee has stabilised and appreciated somewhat while other currencies are still languishing.”