Weekly Wrap: Sensex, Nifty Log Best Week Since 2019 Election Results
BSE Sensex rose 1.72 percent this week to 37,332.79 and the NSE Nifty 50 gained 1.79 percent to close at 11,023.25.
Indian equity benchmarks halted their two-week fall and ended higher after the government announced steps to revive the slowing economy.
The S&P BSE Sensex rose 1.72 percent this week to 37,332.79 and the NSE Nifty 50 gained 1.79 percent to close at 11,023.25. This was the best week for the benchmarks since the 2019 general election results were announced in May.
This comes after the government came up with a slew of measures including the rollback of additional surcharge on foreign investors, helping the markets to stage a comeback.
The markets this week reacted “euphorically” to the government’s first mini fiscal stimulus, Jimeet Modi, founder and chief executive officer at SAMCO Securities, said in an emailed statement. This, however, fizzled out by Friday, he said.
The government merged 10 public sector banks into four after market hours on Friday. Also, India’s gross domestic product grew by 5 percent in the first quarter of 2019-20, the slowest pace in six years, according to the data released by the Central Statistics Office.
Shrikant Chouhan, head of technical research at Kotak Securities, said strong buying in Nifty Next 50 added “substantial gains” to the indices, implying strong interest in mid-cap companies. “Weekly and monthly closings are encouraging and traders should look for buying opportunities in select companies in the coming week.”
According to Dharmesh Shah, head of technical analysis at ICICI Direct, Nifty is set to undergo base formation in the broad range of 10,800-11,200 amid stock-specific action in the upcoming truncated week.
Base formation (in the range of 10,800-11,200) sets the stage for eventual resolve above last four-week high (11,200), leading acceleration of upward momentum towards 11,500 in coming month. So any dips should be capitalised as a buying opportunity.Dharmesh Shah, Head of Technical Analysis, ICICI Direct
All 11 sectoral gauges compiled by the National Stock Exchange ended higher this week, led by Nifty Realty Index’s 9.26 gain.
How Broader Markets Performed
The broader market, represented by the NSE Nifty 500 Index, closed 2.13 percent higher during the week, driven by gains in Minda Corp Ltd., Essel Propack Ltd. and Bombay Dyeing & Manufacturing Company Ltd.
How Currency Markets Performed
The Indian rupee appreciated this week—snapping a seven-week falling streak. The home currency strengthened 0.36 percent against the U.S. dollar to close at 71.41. It ended as the third best-performing major Asian currency this week.
Big Talking Points This Week
- Government to merge ten public sector banks into four.
- India GDP growth crashes to six-year low of 5% in April-June quarter.
- RBI to transfer a record surplus of Rs 1.76 lakh crore to the government.
- China indicates it won’t retaliate now on new U.S. tariffs.
- Indian conglomerates: Bajaj Group creates most wealth for investors amid market turmoil.
- Rakesh Gangwal skips IndiGo AGM, management allays shareholders’ fears.
- Nestle to replace Indiabulls Housing Finance In Nifty 50 from Sept. 27.
- Discounts fail to lift auto sales in August.
- Brexit bite pushes U.K. consumer confidence to six-year low.
Key Events/Data To Watch Next Week
- Sept. 2 : Markit India PMI- Manufacturing
- Sept. 2: Eight infrastructure industries data
- Sept. 4: Markit India PMI Services
- Sept.4: Markit India PMI Composite
- Sept. 5: Balance of payments: Current account balance data.