Riding on the momentum, both the frontline indices of the country, Sensex and Nifty, ended the week with a bang as they sky rocketed to their record highs. Registering the biggest rise in 2014, the benchmark Sensex zoomed to a new all time high of 21,960.89, just 40 points shy of the 22,000- mark. Nifty also surged to its new all time high of 6,537.80, crossing its previous record of 6,415.25 touched on December 9, 2013.
Backed by strong buying in real estate, bank, capital goods and oil & gas shares, Sensex started the session on a strong note and recorded its highest closing ever of 21,919.76, up by 405.92 points. Nifty as well, registered a record closing of 6,526.65 after surging by 125.50 points. Investor wealth also ballooned by Rs 85,000 crore during Friday’s session alone.
A sharp drop in current account deficit (CAD) and easing inflation bolstered expectations that the economy will see a turnaround soon, amid hopes for a strong mandate for the newly elected Government after polls next month, said traders. The rally is being primarily driven by heavy buying from foreign institutional investors (FII), said experts. But they further expressed concerns that the rally was only restricted to frontline indices while madcap and small cap indices continued to trade under pressure. Overall market breadth was marginally negative as both, smallcap and midcap indices ended the session with 0.2 per cent fall.
Over the week, FII investment in the equity markets has grown exponentially and as per the provisional data provided by the stock exchanges, FIIs bought shares worth Rs 2,577.44 crore on Friday. Over the last three sessions, FIIs have invested over Rs 4,500 crore in the Indian markets. The BSE 30-share indicator resumed better and gradually improved further to a lifetime intra-day high of 21,960.89 before settling at 21,919.79, exhibiting a sharp rise of 405.92 points or 1.89 per cent. During the week, the Sensex has seen a spurt of nearly 800 points or 3.79 per cent.
Sectorally, of the 12 indices trading on BSE, 9 indices advanced. The rally was led by real estate and bank indices as they zoomed by 5.4 per cent and 5.35 per cent respectively. Other major gainers included capital goods and oil & gas indices which rose by 4.05 per cent and 3.65 per cent respectively. Healthcare index continued to be the biggest loser on the BSE and fell by 2.02 per cent. Information technology (IT) and technology indices also ended the session under pressure and slid by 1.97 per cent and 1.16 per cent respectively. Both, IT and technology indices saw heavy profit booking after their recent rally, experts added.
Off the 30 stocks comprising Sensex, 22 scrips ended higher led by BHEl which rose by 6.31 per cent. All the banking stocks on the index including ICICI Bank, Axis Bank and HDFC Bank surged by over 5 per cent. Reflecting the fall in second-line stocks, total market breadth turned negative as 1,447 stocks closed in the red while 1,372 concluded in the green. But the total turnover rose to Rs 3,408.88 crore from Rs 2,692.06 crore on Thursday.
Meanwhile, rupee also closed at a new three-month high of Rs 61.07 per dollar after gaining four paise, helped by heavy capital inflows, wrapping up the week with the best gain since December 2013. Weak dollar overseas and selling of the American currency by exporters kept the rupee upbeat, said forex traders. During the session, domestic currency also breached the Rs 61 per dollar mark and registered a high of Rs 60.94 per dollar.
“Weakness in US dollar, sharp rally in local stock markets and strong gains in the euro were seen supporting the positive sentiments in the rupee. Consistent buying by FIIs was further seen adding to gains in the domestic currency. Today’s Non Farm Payroll data from the US will be very significant,” said Abhishek Goenka, CEO, India Forex Advisors.