Indian stock markets closed in the green on Friday, led by surge in shares of public sector banks (PSBs). The benchmark Sensex closed up 43.36 points or 0.17% while the Nifty gained 16.85 points or 0.21%.
Benchmark indices ended positive for the third straight week as the Nifty closed at its highest level since November 4. The Sensex gained 1.2% during the week while the Nifty was up by nearly 1.3%.
The rally in PSB shares was on the back of government’s nod to IDBI Bank to raise Rs 3,771 crore of fresh capital via the qualified institutional placement (QIP) route. The NSE PSU Bank index closed 1.54% higher as shares of Punjab
National Bank and State Bank of India gained more than 1.4%. Shares of IDBI Bank rose 1.12%.
Shares of aviation companies also rallied on Friday as the cost of Jet fuel dropped to the lowest in nearly five years. Shares of Jet Airways and InterGlobe Aviation climbed more than 8% during the session.
Barring Cadila Healthcare, the week has been positive for pharma shares, as the healthcare sectoral on the BSE closed 1.3% higher. Shares of Cadila Healthcare slumped nearly 15% during the week as the pharmaceutical company received a warning letter from the US Food & Drug Administration (USFDA) relating to its Moraiya formulation facility and Ahmedabad API facility.
Investment baking firm Deutsche Bank said in a market research report that prospects of the Indian Pharma sector look positive in the medium to long term, as product launches in US markets and synergies from recent acquisitions will drive the sector’s earning at a CAGR of 24% in the next three years.
The German investment bank, however, said regulatory risks will remain an overhang for the sector. “US sales, which represent the highest proportion of sales for Indian pharma companies, will likely see sluggish growth rates as the ANDA approvals could be delayed, leading to downside risk to consensus earnings for these companies,” Deutsche Bank said in the market research report.
The foreign portfolio investors (FPIs) were net buyers during the week, as they bought equities nearly worth $296 million, Bloomberg data showed. Foreign funds bought equities to a tune of $3.27 billion during the calendar year 2015. This is the worst yearly inflows in four years.
Domestic institutional investors (DIIs), on the other hand, turned net buyers in Indian equity markets for the first time in the previous four years. DIIs, comprising banks, financial institutions and mutual funds, bought equities worth $10.3 billion during 2015.