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Equity indices ended higher on Friday, extending their gains to the fifth consecutive week, as shares in power equipment companies rose in a late rally.
BSE's Sensex rose 38.79 points, or 0.2 per cent, to 20,286.12, its highest close since November 2010. The National Stock Exchange (NSE) Nifty rose 17.4 points, or 0.3 per cent, to 6,187.30. This week, the Sensex advanced one per cent, while the Nifty rose 1.5 per cent.
BSE's power and capital goods indices rose about three per cent each, with ABB gaining about 21 per cent on speculation of a share buyback. Alstom India advanced 14 per cent, while Crompton Greaves rose 9.1 per cent. "Capital goods, realty and power were some of the under-performing sectors which are now catching with the rally in the broader markets. It is like a domino effect, where each sector is taking turns and extending gains, one after the other," said Yogesh Nagaonkar, head of equity (institutional broking), Bonanza Portfolio.
"However, there is no more significant upside expected in these stocks in the near-term," he added.
According to provisional data, foreign institutional investors were net buyers at Rs 867 crore, while domestic institutional investors sold shares worth Rs 716 crore. The advance-decline ratio on the NSE was about one.
The week started on a pessimistic note, after data showed India's trade deficit widened, raising concern on the government's ability to control the government's current account deficit, as well as inflation. But data on Wednesday showed wholesale price index-based inflation softened to a 41-month low, helping the market recoup losses. The data also raised hopes of steeper rate cuts by the Reserve Bank of India next month.
Foreign investors stepped up purchases of Indian shares on Wednesday, buying the most since February, after the inflation data was released---they net bought $311 million of shares, the most since February 7, according to Bloomberg. This raised the inflows into stocks this year to $13.4 billion, a record for the January 1-May 15 period and the second-highest among the 10 Asian markets tracked by Bloomberg, after Japan.
