Weekly market wrap: Nifty, Sensex gained for the fifth week in a row despite the losses on Friday

Selling on the last session of the week forced markets to go home with marginal gains for the week as traders opted to book profit on the table after back-to-back rallies in the recent past. Markets started the week on an optimistic note as sentiments got a boost on the private report stating that overall direct tax collections grew by 40 per cent in the first four months of FY23 to Rs 5 trillion. Also, the central government achieved more than a third of the direct tax collection for this financial year as personal tax. As personal tax collection exceeded corporation tax amid tightened enforcement and compliance measures. The 30-share Sensex advanced 0.31 per cent to 59,646.15 on August 19 from 59,462.78 on August 12. Likewise, the 50-share Nifty index gained 0.34 per cent to 17,758.45.

Government data showed that India’s inflation based on the wholesale price index (WPI) eased to 13.93 per cent in July 2022 as against 15.18 per cent in June, as prices of food articles, non-food articles, and crude petroleum and natural gas declined. However, the final day of trade witnessed a decline and ate most of the markets’ weekly gain as traders were worried as Foreign Institutional Investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 1,706.00 crore on Thursday.

As many as 26 stocks in the Nifty index delivered a positive return to investors last week. With a gain of 10.63 per cent, Adani Ports emerged as the top gainer in the index. It was followed by Eicher Motors (up 6.66 per cent), HDFC Life Insurance (up 5.66 per cent), and Larsen and Toubro (up 4.98 per cent). Tech Mahindra, Bajaj Finserv, Bharti Airtel, and Tata Consumer Products also advanced by over 3 per cent. On the other hand, Apollo Hospitals, Oil and Natural Gas Corporation, and UPL declined 4.01 per cent, 3.38 per cent and 2.61 per cent, respectively.

Ajit Mishra, VP – Research at Religare Broking Ltd said, “Markets lost over a percent in a volatile trading session, tracking mixed cues. After the flat start, the benchmark plunged sharply lower in the first half and remained range bound thereafter. Consequently, the Nifty index finally settled around the day’s low to close at 17,758 levels; down by 1.10 per cent. In line with the index, mostly sectoral indices ended lower and we had a similar trend on the broader front as well. The decline in the index engulfed the gains of the last three sessions and we may see further profit taking ahead. And, it would be healthy after the recent surge. Moreover, participants should maintain caution and prefer defensive i.e. FMCG, pharma over others until the trend resumes.”

Sectorwise, the BSE Power index gained 3.05 per cent during the week gone by. BSE Capital Goods, Realty and Fast Moving Consumer Goods indices also rallied over 1 per cent each. In contrast, the BSE Metal and Oil and Gas index retreated 1.86 per cent and 0.45 per cent, respectively.

The coming week is expected to be a volatile one for local equity markets on account of the F&O expiry, which is scheduled to take place on August 25, 2022. Meanwhile, the trend in investment by foreign institutional investors and the movement of the rupee against the dollar will also be closely watched by the market participants. Traders would be looking forward to the Deposit Growth and Bank Loan Growth which is scheduled to be released on August 26. The value of deposits in India increased 8.4 percent year-on-year in the fortnight ending July 15, 2022. On the same day, Foreign Exchange Reserves are also going to release.

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), Pending Home Sales on August 24, GDP Growth Rate, Initial Jobless Claims on August 25, and finally Goods Trade Balance on August 26.