A financial trader monitors data on computer screens on the trading floor. (Photographer: Jasper Juinen/Bloomberg)

Weekly Wrap: Sensex, Nifty Remain Flat As Oil Woes Offset Earnings Optimism

Indian equity benchmarks remained flat this week as higher crude prices offset the investor optimism stemming from corporate earnings.

The S&P BSE Sensex and the NSE Nifty 50 Index ended the week flat at 39,067 and 11,752, respectively. Brent crude hit a six-month high this week at $75 a barrel after the U.S. said it wouldn’t renew waivers allowing China and other major economies to import Iranian oil without facing its sanctions.

“Indian markets lost some gains as worries over macro risks from rising crude prices and depreciating rupee affected investor sentiments,” said Sanjeev Zarbade, vice president (Private Client Group research) at Kotak Securities. “At the current market levels, the key events include start of sanctions on Iran on oil exports, which is likely to keep crude prices elevated, and quarterly earnings results,” he said in a statement.

Jimeet Modi, founder and chief executive officer at SAMCO Securities, in a separate statement, said the current market phase was indecisive and the investors should not “go shopping” at least till May 23, when the outcome of elections are scheduled to be announced.

The Nifty had made a failed attempt to cross its all-time high but since then it is languishing around those levels. Such consolidation is expected to last longer but any decisive breakout above 11,900 will signal resumption of an uptrend. To protect the long positions, however, one needs to keep a stop below 11,500, which can take the market much lower if such lower support is broken.
Jimeet Modi, CEO, SAMCO Securities

How The Broader Market Performed

The NSE Nifty 500 Index dropped 0.50 percent during the week, dragged down by losses in Reliance Communications Ltd. and HEG Ltd.

Sectoral Performance

Nine of the 11 sectoral gauges compiled by the National Stock Exchange fell during the week, led by a 5.3 percent decline in the NSE Nifty Auto Index. On the other hand, the NSE Nifty IT Index was the biggest gainer, up 2.8 percent.

How The Rupee Fared

The Indian rupee ended lower against the U.S. dollar, halting its two-week rally. The domestic unit weakened 0.95 percent to close at 70.02 against the greenback, becoming Asia’s third-worst performing currency.

(as of 6:25 p.m. on April 26)

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Don’t forget

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Key Events/Data To Watch Next Week

  • April 30: Eight Infrastructure Industries data for March.
  • May 2: Nikkei India PMI Manufacturing data for April.