Signage for the CNX Nifty Index is displayed as employees walk through the atrium of the National Stock Exchange of India Ltd. (NSE) building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Weekly Wrap: Sensex, Rupee Break Record, Modi Wins No-Confidence Motion

Indian stocks witnessed a roller-coaster ride this week as investors assessed the no-confidence motion against the Modi government amid quarterly earnings.

The S&P BSE Sensex Index fell 0.1 percent this week, its worst weekly decline in two months, to end at 36,496. The NSE Nifty 50 Index was little changed and ended marginally above 11,000.

The markets are expected to consolidate around the same levels, G Chokkalingam, founder and managing director at Equinomics Research & Advisory, told BloombergQuint in an interaction. “We do not see an immediate revival in stock markets as the ongoing trade war is signalling deflationary pressures and the oil and metal stocks are the primary ones that are going to be impacted.”

The markets witnessed a correction after rallying in the last two weeks as investors assessed the no-confidence motion on the Modi government amid earnings optimism, Kiran Jadhav & Associates' Ashish Kelkar said, adding that several stocks witnessed a profit booking after the companies reported strong earnings. Kelkar sees Nifty reaching 11,075 levels going forward and could even reach around 11,150 levels if it crosses the former.

Weekly Wrap: Sensex, Rupee Break Record, Modi Wins No-Confidence Motion

Bajaj Finance Ltd. was the week’s biggest gainer after its shares rose nearly 10.2 percent on the NSE, driven by strong quarterly earnings in the April-June period and healthy income growth forecast for the current financial year. The stock closed 7.9 percent higher to end at an all-time high at Rs 2,721.35.

The rally may not continue as banking and financial shares may witness profit booking going forward, Chokkalingam, said. “The stocks are commanding huge premium valuations, which I believe, is not sustainable.”

Weekly Wrap: Sensex, Rupee Break Record, Modi Wins No-Confidence Motion

The broader market index snapped its two-week rally and ended lower by 0.7 percent this week. The NSE Nifty Midcap and the NSE Smallcap Indices too underperformed the benchmark 50-stock index.

The decline in the NSE Nifty 500 Index was led by PC Jeweller Ltd. after it cancelled its share buyback plans, followed by Shree Renuka Sugars Ltd.

Seven out of 9 sectoral gauges compiled by the National Stock Exchange fell this week, led by the NSE Nifty 50 Metal Index's 5.9 percent slump. The NSE Nifty PSU Bank Indes was the top sectoral gainer, up 1.4 percent.

Domestic investors infused around Rs 1,300 crore in the market this week, while foreign investors pulled out around Rs 1,018 crore from debt and equities during the period as on July 19.

The Indian rupee was among the worst currency performers in Asia. It was the only top performer among its Asian peers last week.

The rupee rebounded from a record low yesterday on optimism the Modi government is set to win a no-trust vote in Lok Sabha today, according to a Bloomberg report. The state-run lenders sold dollars in the morning which also helped to curb losses in the local currency, Bloomberg said in a separate report, quoting Mumbai-based traders.

Big Talking Points This Week

  • UPL to buy Arysta Lifescience for $4.2 billion.
  • Get ready to pay more for oil, says CLSA’s Chris Wood.
  • Impact on Hindalco if Novelis buys Aleris.
  • What India’s best known investors bought and sold in June quarter.
  • LIC Board gives nod to IDBI Bailout; IDBI Bank seeks government nod to bring LIC on board as promoter.
  • India’s wholesale inflation near a five-year high.
  • Cabinet hikes sugarcane price, ISMA says mills can’t afford it.
  • BookMyShow raises $100 million in TPG Group-led funding.
  • Idea Cellular lost 25 lakh customers in May, most in nine months.

Don’t forget:

Also Watch Out For Next Week

  • HDFC AMC’s Rs 2,800-crore IPO opens next week
  • Eight infrastructure industries’ data to be released on July 25.