The government's decision to cut excise duty on fuel prices coupled with robust quarterly results, improved PMI numbers and strong festive season fuelled sentiment on Dalal Street for the week ended November 12. As a result, the benchmark BSE Sensex advanced 619.07 points, or 1.03 per cent, to 60,686.69 during the week gone by. Likewise, the 50-share NSE Nifty index gained 185.95 points, or 1.04 per cent to 18,102.75.
As many as 31 stocks in the Nifty 50 index settled the week in the green with Mahindra and Mahindra gaining the most with 7.44 per cent. It was followed by Bharti Airtel (up 6.05 per cent), Tech Mahindra (up 5.26 per cent), Adani Ports (up 5.12 per cent) and Titan Company (up 4.43 per cent). On the other hand, IndusInd Bank, Divi's Laboratories and State Bank of India declined 12.79 per cent, 6.99 per cent and 3.60 per cent, respectively.
In general, Friday's sharp recovery aided the benchmark equity indices to end the volatile week in the green. The 30-share index settled 767 points, or 1.28 per cent, up at 60,686 on November 12.
Vinod Nair, head of research, Geojit Financial Services said, "During the week, the global markets remained highly volatile as inflation fears elevated. The week started with disappointing numbers from China, CPI rose 1.5 per cent YoY, while the producer price index rose by 13.5 per cent YoY owing to imported inflation and domestic supply shortages. The US inflation hit a 30-year high level of 6.2 per cent YoY adding fears for an earlier than expected rate hike."
"The domestic market also followed this trend, however, the momentum regained at the end of the week due to sectors in the market which are least impacted by inflation like IT, reforms, supportive monetary policy, good quarterly earnings and strong domestic macro data points," he added.
Sectorwise, the BSE Telecom index advanced 4.18 per cent during the week. Oil & Gas, Capital Goods, Power, TECk and Information Technology indices gained between 2 per cent and 4 per cent. However, Bankex, Realty and Metal each declined over 1 per cent.
Earlier, the central government last week announced a cut in excise duty on petrol by Rs 5 per litre and diesel by Rs 10 per litre on the eve of Diwali. The move was followed by reductions in value-added tax (VAT) by a couple of states.
Relentless foreign outflows continued to worry investors during the week. Foreign institutional investors have pulled out Rs 4,694 crore from the cash segment of the equity markets in November so far, data available with NSDL showed.
The week ahead
Most of the quarterly results and the festive mood are behind us, indices are expected to move sideways. However, Yesha Shah, head of equity research, Samco Securities said, "As markets across the world are trying to decode the implications of rising inflation, any intensive selling by FIIs may take Indian indices lower, unless the domestic players provide support."
Next week the domestic equity market will also see the listing of a slew of new IPOs.
On the technical front, Nifty on the weekly chart formed a small positive candle with a long lower shadow. The upmove as per the weekly timeframe chart has occurred from near the crucial 20-week EMA around 17,700 levels in this week. This moving average has been offering support for the market for the past few months.
Nagaraj Shetti, technical research analyst, HDFC Securities said, "Friday's sharp upmove seems to have nullified the short term negative pattern on the daily chart. Further upmove from here could be considered as an upside breakout of important resistance and that could pull Nifty towards 18,350 levels in the short term. Immediate support is placed at 18,000 levels."
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