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Thanks to a smart recovery on the last trading session, the benchmark indices recorded gains in F&O expiry-influenced week, despite a record low hit by the rupee, persistent selling by foreign institutional investors and stall of winter session amid an uproar in the Parliament over the government’s recent demonetization move.
During the week ended November 25, the S&P BSE Sensex added 166 points, or 0.63%, to settle at 26,316, while the broader Nifty50 gained 40 points, or 0.50%, to close the week at 8,114.
Midcap and Smallcap stocks jumped. The BSE Midcap index rose 0.97%, while the BSE Smallcap index surged 1.30%.
“With about 2% gains on Friday, the market came back in the green for the week as well as for the calendar year. The rise was led by bargain hunting at lower levels and sentiment was buoyed by stable rupee. Markets have been under pressure partly because of consistent FII selling,” said Dipen Shah, Senior Vice President & Head PCG Research, Kotak Securities.
Yet some analysts including Jayant Manglik, President, Retail Distribution at Religare Securities did not see it as a trend reversal and suggested waiting on the sidelines for further confirmation, especially on the banking pack.
“The Nifty50 recovered around the key support at 7,900 and finally managed to stay above 8,000 despite the week starting with the extreme negativity. The expectation of hike in US interest rate is likely to keep the market volatile, going forward. Only a breakout above 8,200 would confirm a trend reversal,” said Rohit Gadia, Founder & CEO, CapitalVia Global Research.
Sectors and stocks
The week saw BSE IT index gaining 6.6%, followed by the BSE Teck index (5.2%), the BSE Metal index (4.4%), the BSE Consumer Durables index (2.9%), the BSE Healthcare index (2.7%), the BSE FMCG index (1.2%) and the BSE Realty index (1.1%).
The BSE Bankex and the BSE Auto index, on the other hand, shed 2.5% and 2.2%, respectively. The BSE PSU and the BSE Power slipped 0.8% each during the same period.
Among Nifty50 stocks, Eicher Motors, BHEL and SBI plunged 7.2%, 5.6% and 5.4%, respectively for the week. Mahindra & Mahindra lost 5.4%, Bank of Baroda fell 5.1%, while Tata Motors slumped 4%.
Gainers included Tech Mahindra (9.4%), Hindalco (9.2%) and TCS (8.3%). Lupin, Wipro and Infosys added 6.3% each.
FII outflows
Foreign investors sold Rs 5,051.06 crore worth of equities in four days to Thursday, data available with National Securities Depository suggested. On Friday, they sold equities worth Rs 372.88 crore, provisional data available with the BSE showed.
For the month, they were net sellers with net sell value to the tune of about Rs 17,000 crore.
FII remained net sellers in derivative market too with them using every bounce to liquidate further.
“Foreign funds have been flowing out because of the weakness in the rupee, apart from concerns about a slowdown in the economy,” said Dipen Shah.
Rupee hits all-time low
On Thursday, the rupee touched its fresh low to hit 68.86 against the US dollar in intraday deals. However, the currency recovered to settle the week at 68.46 vs US dollar, with the Reserve Bank of India (RBI) probably intervening in the market, say experts. Brokerage Edelweiss Securities believes the rupee weakness will largely be contained below the levels of 69.50 to 70.00 for the next few weeks.
November F&O expiry worst in 15 months
Stocks suffered their worst setback in 15 months in the November futures and options (F&O) series that concluded on Thursday. The benchmark Nifty fell 7.5%, most since the August 2015 derivatives series. The derivatives contracts expire on the last Thursday of every month.
Market next week
Key economic data along with a few quarterly earnings will grab the focus next week. GDP data for the September quarter and October fiscal deficit data will be released on Wednesday, while the Nikkei Markit Manufacturing PMI for the month of November will be out on Thursday.
Among the companies scheduled to release their numbers next week include Triveni Engineering & Industries Ltd. National Fertilizers Ltd. Punj Lloyd Ltd. and TV Today Network Ltd.
