A trader reacts as he looks at financial data on computer screens on a trading floor in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

Weekly Wrap: Sensex, Nifty Halt Three-Week Rally As Investors Assess Elections Over Rupee, Crude

Indian equity benchmarks ended a three-week rally, their longest in over two months, as investors assessed the general elections in 2019 over a strengthening rupee and falling crude oil prices.

The S&P BSE Sensex fell 1.3 percent this week and ended below 35,000—a ten-day low. The NSE Nifty 50 closed at 10,526.75 after falling nearly 1.5 percent this week, led by Indiabulls Housing Finance Ltd., Tata Steel Ltd. and Wipro Ltd.

Weekly Wrap: Sensex, Nifty Halt Three-Week Rally As Investors Assess Elections Over Rupee, Crude

“The markets witnessed a sell-off as investors pulled out of stocks due to the event risk of elections as the investors prefer to play lightly on the stocks,” Sanjiv Bhasin, executive vice president of Markets at IIFL, told BloombergQuint in a telephonic conversation.

Choice Broking’s Executive Director Sumeet Bagadia agreed. “The markets will move in a range before the state elections. We expect Nifty to move around 10,300-10,700 levels in the next seven-to-10 days,” Bagadia told BloombergQuint over the phone. “We feel that the markets will give a breakout as it has already witnessed a correction. Any dip in markets could be used as a buying opportunity.”

The markets also witnessed a sell-off due to the rout in the U.S. markets and the upcoming derivatives expiry week, Bhasin said. He expects a better “colour” in the markets going forward after the derivatives expiry next week.

Six out of 11 sectoral gauges compiled by National Stock Exchange fell, led by the NSE Nifty IT Index, as the rupee strengthened that led to a selloff of tech shares. On the flipside, the NSE Nifty Realty Index was the top sectoral gainer, rising 1.9 percent.

The NSE Nifty 500 Index fell 1.3 percent. The 500-share gauge also snapped its longest weekly gaining streak in over two months.

Rupee: The Best EM Currency This Week

The Indian rupee strengthened for the third week against the U.S. dollar and ended at 70.69, its highest in over three months.

The rally in the home currency was led by falling crude oil prices—which fell by over 5 percent this week to around $63 a barrel—and the truce between the Reserve Bank of India and the government over capital reserves. The local unit was the best-performer among emerging market peers.

Big Talking Points This Week

  • Q2 Results Review: The biggest earnings downgrades and upgrades.
  • RBI to revisit economic capital framework, consider restructuring scheme for stressed MSMEs.
  • RBI’s relaxations to provide Rs 35,000 crore capital relief to government banks.
  • Reliance considers plan to expand world’s largest refinery complex.
  • Tycoon Mistry plans $1 billion share offer amid rare sales.
  • Biggest Indian utility said to mull buying distressed generators.
  • Zee promoters looking to seize the next trend, not exit, says Ronnie Screwvala.
  • A $2 billion health empire run by four sisters makes a comeback.
  • Supreme Court upholds Binani Cement sale to UltraTech.
  • Bharti signs for over $2 billion loan amid threat of ratings cut.
  • Dewan Housing sells Rs 7,400-crore loans in two months.
  • Glenmark’s Saldanha says debt not a concern, mulls stake sale in unit.
  • Auto makers stare at worst festive sales in five years.
  • Why cement makers see signs of revival.
  • U.S. Court rules in favour of Dr. Reddy’s over Suboxone Film Generic. What this means for the drugmaker.
  • Edelweiss says look past India Polls; stocks will climb in 2019.
  • Goldman sees double-digit emerging market stock returns in 2019.

Don’t Forget:

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  • WhatsApp names Ezetap founder Abhijit Bose its first India Head.
  • Nissan's Ghosn arrested in Japan, threatening three-way alliance.
  • No end in sight for Crypto sell-off as Bitcoin approaches $4,000.
  • Indian airlines seek emergency credit from oil firms, airports.
  • Broken supply chain drags Patanjali’s sales down first time in five years.
  • OPEC’s Worst Nightmare: The Permian is about to pump a lot more.
  • Goldman, JPMorgan still see five Fed hikes by end of 2019.
  • European Union unveils policy paper on boosting ties with India.