On the back of a net FII inflow of $1.1 billion this week, the Indian equity markets continued to rise for a second week despite the intra-day trade benchmark indices shedding their initial gains to end the day with marginal gains on Friday. Dealers reckon that sustained inflows from the foreign funds and good amount of buying in the auto stocks led the market to recover from the negative terrain.
?Auto stocks are in green since past few days, investors are upbeat that this sector will have better than expected second quarter results,? said Mehul Dedhia, associate vice-president at Sharekhan. In the last one week, auto sector stocks have surged by 572.71 points or 9.50% to 6,603.10 points.
However, the market saw a few choppy moments due to lack of any major cues on the domestic front and profit-booking in banking sector stocks. With intense selling in the banking throughout the trading session, ICICI bank lost 3.35% or 29.20 to Rs 843.35. On Friday, the 30-share Sensex of Bombay Stock Exchange (BSE) added 30.19 points or 0.18% to close the day at 16,741.30 points, while the broader S&P CNX Nifty of National Stock Exchange (NSE) gained 10.50 points or 0.21% to end at 4,976.05 points.
Analysts believe that in next few days markets momentum is likely to take a pause as there has been a continuous two-week rally and there would be profit booking. In the last one week, Nifty has gained over 146.50 points or 3.03%, while Sensex have added 477 points or 2.93%. A head of equity at leading broking house said, ?With markets remaining close on Monday and expiry of September derivatives contract in the coming week, markets are likely to remain flat.? On Monday markets are closed for Id.
Despite markets starting the week with a negative gap on Monday, strong cues from the global markets and reports of higher advance tax payment by some Indian companies, guided market to close with smart gains on Monday and Tuesday. But again on Wednesday and Thursday, it remained flat.
?I don?t think markets are likely to witness huge decline from this level as there is tremendous inflows from the foreign funds. On Friday, foreign institutional investors bought stocks worth Rs 1,486.08 crore while domestic institutional investors (DII) were net sellers at Rs 505.38 crore. Apart from that, once again we are seeing intense buying in the infrastructure stocks in the market?, Dedhia added. Meanwhile, emerging markets saw a drop as the MSCI Emerging Markets Index fell from its highest level in more than a year, as commodity prices retreated and Chinese regulators said banks face higher risks.
The MSCI Emerging Markets Index slipped 0.2% to 918.51 by mid-afternoon in London, trimming this week?s gain to 2.6% . The gauge of 22 developing nations dropped for the first time in four days on concern this year?s 62% rally outpaced earnings prospects after valuations rose to 21 times reported income, the highest level since 2000. In India, though, the volatility index or VIX in NSE stood at 25.86% on Friday compared to 27.27% on Thursday.
