Weekly Wrap: Sensex’s Fifth Weekly Gain, L&T’s Buyback, Another Milestone For RIL
Indian equity benchmarks rose for the fifth week in a row, posting their longest stretch of weekly gains in two months.
The S&P BSE Sensex rose 0.8 percent to 38,252 and the NSE Nifty 50 index climbed 0.75 percent to 11,557.
Gains were led by Reliance Industries Ltd. after its stock rose to a fresh record high of Rs 1,277.50. With that surge, Reliance Industries achieved another milestone: it became India’s first company to clock a market capitalisation of Rs 8 lakh crore.
Larsen & Toubro Ltd. also added to gains after its board approved its first share-buyback proposal of Rs 9,000 crore.
The company will repurchase 6 crore shares (or 4.3 percent of equity) at Rs 1,500 apiece—higher than the stock's all-time high of Rs 1,470 it clocked on Feb. 1—according to its exchange notification today.
This week's up move was fueled by gains in Reliance Industries and Larsen & Toubro, AK Prabhakar, head of research at IDBI Capital Market, told BloombergQuint over the phone. There is a derivative expiry next week, he said, adding that the Fed chairman will speak at Jackson Hole. “If there are no negative developments the up move will continue next week as well.”
“Markets are looking strong and the Nifty can touch 11,700-11,800 levels going ahead,” Sumeet Bagadia, associate director at Choice Broking, told BloombergQuint. On the downside, Bagadia said, support for Nifty is around 11,500-11,400 levels, and the dips will be used as buying opportunity and the up move will be led by pharma stocks.
The Nifty Pharma index was the top sectoral gainer for the second week in a row after drugmakers such as Dr. Reddy's Labs Ltd., Lupin Ltd. and Cadila Healthcare Ltd. received Establishment Inspection Report from the U.S. drug regulator, the Food and Drug Administration, for their plants at Srikakulam, Nagpur and Ahmedabad, respectively.
The Indian rupee rebounded from record lows hit last week and became the fourth-best performing Asian currency. The local unit rose 0.36 percent to settle at 69.91 per dollar.