Market review for week: Narendra Modi reform hopes drive BSE Sensex, NSE Nifty up over 2%

PTI Posted online: Saturday, May 24, 2014 at 0000 hrs
Mumbai : The benchmark BSE Sensex and NSE Nifty moved up by more than two per cent during the week logging their all-time closing peaks on hectic buying by investors amid hopes of reforms from the incoming Narendra Modi-led government.

Markets ended in the green for the third consecutive week as both the indices gained by more than 10 per cent in three weeks on persisting buying mainly in realty, power, PSUs, metal, consumer durables, capital goods and refinery sectors.

A clear mandate for the BJP has rekindled hopes for structural reforms and better investment climate and the country's growth is likely to accelerate to 6.5 per cent in FY16, a Goldman Sachs report said.

The BSE Sensex resumed higher 24,340.32 and hovered in a range of 24,745.86 and 24,107.99 before ending the week at 24,693.35, showing a gain of 571.61 points, or 2.37 per cent.

The NSE 50-share Nifty also rose by 164.10 points or 2.28 per cent to finish the week at 7,367.10.

Country's largest bank State Bank of India (SBI) gained by 14.10 pct despite decline in the Q4 net profit but asset quality showed signs of improvement. "SBI reported healthy performance on asset quality front while operating performance came ahead of our estimates," said Angel Broking.

Investors heavily bought power stocks, including NTPC and Tata Power, on reports that the Narendra Modi-led NDA government is likely to harness solar power sector and give a fillip to development of offshore wind energy.

Foreign investors sentiment was bullish after credit rating agency Moody's said landslide victory of BJP-led NDA in polls is credit positive for India as a stable central government is expected to address economic woes. They invested net Rs 1,522.10 crore during the week as per SEBI's record including the provisional figure of May 23.

Second-tier stocks attracted heavy buying interest from retail investors and notched handsome gains. The BSE smallcap and BSE midcap indices closed up 15.75 per cent and 11.62 per cent respectively, outperforming the Sensex.

While the rising rupee cast its shadow on earnings of IT and Pharma sectors after the local currency surged to 11-month high against the US dollar to 58.33.

Eighteen scrips out of the 39-share Sensex ended higher while 12 others closed lower.

Other major gainers were SSLT (24.60 pct), NTPC (21.60 pct), Bharat Heavy Electricals Ltd (BHEL) (18.80 pct), Tata Power (16.70 pct), Maruti Suzuki (10.70 pct), Tata Steel (8.42 pct), Hindalco Ind (7.73 pct), Axis bank ((6.15 pct), Larsen (6.01 pct), ONGC (5.86 pct) and HDFC (5.37 pct) and RIL 4.38 pct while ITC dropped by 6.91 pct, Sun Pharma 4.65 pct, Tata Motor 4.09 pct and Dr Reddy's Laboratories 4.22 pct.

Among the S&P sectoral indices, Realty rose by 23.13 pct followed by Power 17.29 pct, PSU 13.65 pct, Metal 13.11 pct, Consumer Durbale 10.12 pct, Capital Goods 9.59 pct, Oil&Gas 4.90 ct, Bankex 3.11 pct and Auto 2.46 pct while HC dropped by 2.42 pct, FMCG also 2.42 pct and IT by 2.34 pct.

The total turnover at BSE and NSE rose to Rs 26,841.37 crores and Rs 1,29,868.91 crores respectively from 21,792.18 and Rs 1,13,792.38 crs.