Markets shrug off tapering fear to post biggest gain in 3 wks

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SummaryEquities witnessed their biggest weekly gain since November 29

Equities witnessed their biggest weekly gain since November 29 as the Street shrugged off fears linked to tapering of fiscal stimulus in the US, while RBI positively surprised the markets by keeping interest rates unchanged.

Foreign institutional investors (FIIs) accelerated their buying in equities, notwithstanding the $10-billion tapering by the Fed during the week. According to provisional data by stock exchanges, FIIs net bought roughly $160 million of Indian shares on Friday, taking their tally to almost $1 billion during the week.

FIIs had bought $269 million of Indian shares in cash market during the previous week, while the amount stood at $448.65 in the week prior to that, and $211 million in the week ended November 29, Bloomberg data show.

Posting its biggest single-day gain in nearly a month, Sensex ended the day 1.8%, or 371.1 points higher, at 21,709.72 on Friday. The Nifty, too, posted its biggest one-day gain since November 25. The 50-share gauge ended at 6,274.25, up 107.6 points, or 1.74%, led by the rally in oil & gas, realty and automobile shares.

Shares of Reliance Industries (RIL) gained 4.5% after the government allowed the energy major to double natural gas prices from April next year, thereby, sending the gauge of its single biggest day gain in over a year.

For the week, benchmark indices gained nearly 2%. Market breadth was strong, with 26 of 30 Sensex companies ending positive. Gainers included Maruti Suzuki (7%), based on the reports of stake hike by Suzuki Motor Corp, BHEL (6.9%), Cipla (6.3%), TCS (5.8%), Wipro (5.78%), Sesa Sterlite (5.7%) and Infosys (5.3%).

Mood in Indian equities was also reflected in global equities. Dow Jones ended up 2.79%, whereas S&P 500 gained 1.92%. Other major Asian and European indices ended up in the range of 1-4%. List included FTSE (2.33%), CAC (2.79%), DAX (4.07%) and Nikkei 225 Index (3.03%).

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