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Equity indices ended higher on Friday, extending their gains to the fifth straight week as shares in power equipment companies, which have not participated in the recent broad-market upsides, rose in a late rally.
BSE’s Sensex rose 38.79 points or 0.2%, to 20286.12, its its highest close since November 2010. NSE’s Nifty gained 17.40 points or 0.3%, to 6187.30. The Sensex advanced 1.0% this week, while the Nifty rose 1.5%.
BSE’s power and capital goods indices rose roughly 3% each with ABB gaining about 21% on speculation of a share buyback. Alstom India advances 14% and Crompton Greaves was up 9.1%.
“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 of the sectors 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 said.
Foreign institutional investors (FIIs) were net buyers at Rs 867 crore, while DIIs sold shares to the tune of Rs 716 crore, according to provisional data. The advance-decline ratio on the NSE stood at about one.
The week started on a pessimistic note after data showed trade deficit widened, raising concerns about the government’s ability to control current account deficit and inflation. But, the lower-than-expected inflation data on Wednesday, which showed wholesale prices has softened to a 41-month low, revived sentiment, helping the market recoup losses.
The lower inflation reading raised hopes of steeper rate cuts by the Reserve Bank of India next month.
Overseas investors stepped up purchases of Indian shares on Wednesday, buying the most since February after the inflation data. Foreigners bought $311 million more of shares than they sold on May 15, the most since Feb. 7, , according to Bloomberg, taking total inflows into stocks this year to $13.4 billion.
That’s a record for the period and the second-largest among 10 Asian markets tracked by Bloomberg, behind Japan.
