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Weekly market wrap: Sensex climbs 1,445; ​Divi’s Labs, Tata Steel rally

Weekly market wrap: Sensex climbs 1,445; ​Divi’s Labs, Tata Steel rally

The Budget week turned in favour of bulls as the benchmark equity indices rallied over 2 per cent for the week ended February 4. 

As many as 40 stocks in the Nifty index settled the week in the green with Divi’s Laboratories gaining the most 9.23 per cent. As many as 40 stocks in the Nifty index settled the week in the green with Divi’s Laboratories gaining the most 9.23 per cent.

 

The Budget week turned in favour of bulls as the benchmark equity indices rallied over 2 per cent for the week ended February 4. The 30-share BSE Sensex surged 1,445 points to 58,644.82 in the past five trading sessions. Likewise, the 50-share NSE Nifty index gained 414 points to 17,516.

Domestic equity market kicked off the week on a positive note as market participants preferred to buy beaten-down stocks after two straight weeks of sell-off. Meanwhile, finance minister Nirmala Sitharaman unveiled a Budget that aims to support growth amid continued disruption from Covid-19 and rising inflation. Sitharaman presented a Rs 39.45 lakh crore budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy.

Vinod Nair, head of research, Geojit Financial Services said, “Budget was in line with market expectation. The market welcomed the long-term growth-oriented budget given no headroom for cautiousness and populist measures. However, as global cues turned in favour of bears, the domestic market turned volatile towards the end of the week.”

US markets were under pressure following weak earnings numbers reported by Meta (Facebook). The European market also lacked strength as the Bank of England imposed a back-to-back rate hike during yesterday’s policy meeting while the most dovish European Central Bank acknowledged the risk of rising inflation signalling a rate hike in near future.

As many as 40 stocks in the Nifty index settled the week in the green with Divi’s Laboratories gaining the most 9.23 per cent. It was followed by Tata Steel (8.45 per cent), Sun Pharmaceutical (up 8.05 per cent), HCL Technologies (7.71 per cent) and ITC (up 7.67 per cent). On the other hand, NTPC, Mahindra & Mahindra, UPL and SBI Life Insurance each declined over 2 per cent.

Among the sectoral indices on the BSE, the Metal index rallied the most 6.91 per cent. Healthcare, FMCG, IT, Bankex, Realty, Telecom and Power gained between 0.90 per cent and 3.73 per cent.

In the forthcoming week, market participants would be eyeing the data of Index of Industrial Production (IIP), which is scheduled to be released on February 11. Industrial production in India increased 1.4 per cent year-on-year in November of 2021, slowing from an upwardly revised 4 per cent growth in October.

Meanwhile, the Reserve Bank of India (RBI) is widely expected to hike up to 0.25 per cent in the reverse repo rate at which the RBI absorbs excess liquidity and leave the repo rate at which it lends, to narrow the policy rate corridor.

The MPC, headed by RBI Governor, is scheduled to meet for three days beginning February 6 and will announce its decision on February 9.

In the ongoing result season, companies including Castrol India, Paisalo Digital, PB Fintech, TVS Motor Company, Union Bank Of India, Bata India, Bajaj Electricals, Bharti Airtel, Data Patterns (India), Escorts, Godrej Consumer Products, Granules India, IRCTC, MGL, NMDC, TTML, ACC, Bosch, Nykaa, Power Grid, SAIL, Tata Power, Amara Raja Batteries, HAL, Hero Motocorp, Hindalco Industries, M&M, MRF, RCF, Tata Chemicals, Ashok Leyland and NHPC will announce their financial results for the quarter ended December 31.

Commenting on the Union Budget, Yesha Shah, head of equity research, Samco Securities said, “Although the Budget’s short-term impact on the broader markets has been waning, it does provide a foundation for determining which parts of the economy are likely to gain in the medium to long term perspective and presents an opportunity to structure one’s portfolio accordingly.”

“This time, the sectors that are anticipated to outpace the others from the budget standpoint include the infrastructure sector, due to the government’s continuous focus on developing world-class modern infrastructure including highways, railways, mass transport ways and logistic parks. This is likely to boost the pipeline of orders for listed contractors and infrastructure developers, as well as capital goods, cement, logistics, and commercial vehicle firms,” Shah said.

Published on: Feb 04, 2022, 7:54 PM IST
Posted by: Sana Ali, Feb 04, 2022, 7:52 PM IST