Weekly Wrap: Sensex, Reliance And Ambani Cross Major Milestones 

Indian stocks capped their best weekly gains in nearly six months as crude oil prices eased and first-quarter earnings season was off to a strong start.

The S&P BSE Sensex climbed 2.5 percent this week, its sharpest surge since week-ended Jan. 19. It closed little changed on Friday at 36,541.63. The NSE Nifty 50 Index rose 2.3 percent, its best weekly rally in over a year, to end at 11,018.90.

Yet investors are still not making money as small- and mid-cap stocks are declining, according to IIFL's Senior Technical Analyst Hadrien Mendonca. Going forward, the three factors that may aid the market are easing crude oil prices, strengthening of the rupee and global cues, he said. “The Nifty is likely to test the 11,400 levels in the next few months.”

Avinash Gorakshakar agreed. The current rally in benchmark indices is likely to continue going forward, the head of research at Joindre Capital Services told BloombergQuint.

Reliance Industries Ltd. was the biggest gainer of the week, rising over 12 percent. The rally helped the oil and gas major reclaim the 100-billion market capitalisation after more than a decade while making owner Mukesh Ambani the richest Asian, toppling Alibaba founder Jack Ma.

Six out of nine sectoral gauges compiled by NSE fell this week, led by NSE Nifty PSU Media Index’s 4.5 percent decline. PVR Ltd., India’s largest multiplex chain, fell 11.7 percent after the Maharashtra government decided to allow outside food in multiplexes and that the cinema operators should sell food only at the maximum retail price.

NSE NIfty IT Index was the top sectoral gainer, up 3.7 percent, after TCS' strong earnings and HCL Technologies' Rs 4000-crore buyback announcement.

Domestic investors infused around Rs 2,288 crore in the market this week, while foreign investors pulled out around Rs 1,175 crore from debt and equities during the period as on July 12.

The NSE Nifty 500 Index gained 1.7 percent, clocking its best weekly rally since April. The index, however, has declined 1.5 percent so far this year.

Rupee: The Lone Warrior

The Indian rupee was the top performing currency among its Asian peers this week, partly buoyed by data which showed retail inflation grew less-than-expected last month. The rupee rose for the first time in three weeks.

However, the strength in the local currency may be short lived as India’s trade deficit widened the most in five years as crude and petroleum products continued to inflate the import bill.

Big Talking Points This Week

• Tech giants TCS Ltd. and Infosys Ltd. and Mumbai-based lender IndusInd Bank Ltd. reported earnings.
• U.S., China said they are open to talks amid an escalating trade war.
• India’s industrial output growth slowed to a seven-month low in May.
• HCL Technologies announced a Rs 4,000-crore buyback.
• NCLT dismissed Cyrus Mistry’s plea against Tata Sons.
• Fortis' board approved a binding bid from Malaysia’s IHH Healthcare.
• LIC-IDBI Bank deal may conclude by September.
• Telecom Commission approved net neutrality and the new telecom policy.

Don’t Forget

• Supreme Court started hearing the case on legalisation of gay sex.
• U.K. Prime Minister Theresa May said the trade deal with the U.S. is back on track after Trump’s criticism.
• WhatsApp started a new feature to let users identify forwarded messages.
• France will face Croatia on July 15 for FIFA World Cup 2018.
• Idea Cellular must backstop $2-billion spectrum liabilities for Vodafone merger.

Earnings To Watch Next Week

• Hindustan Unilever Ltd.
• Zee Entertainment Enterprises Ltd.
• Wipro Ltd.
• Bajaj Auto Ltd.
• Ultratech Cement Ltd.
• Kotak Mahindra Bank Ltd.
• HDFC Bank Ltd.
• Bajaj Finance Ltd.
• Bajaj Finserv Ltd.

Data to watch: India to report wholesale price inflation data for last month on July 16.