Weekly Wrap: Sensex, Nifty Resume Rally On Strengthening Rupee

Indian equity benchmarks resumed their weekly rally after a blip last week as cooling crude oil prices and a strengthening rupee buoyed investor sentiment.

The S&P BSE Sensex Index rose 3.47 percent this week to end at 36,194, its highest level in nearly two months. The NSE Nifty 50 Index closed at 10,876 after advancing 3.32 percent this week, led by Tata Consultancy Services Ltd., Infosys Ltd. and IndusInd Bank Ltd.

The markets witnessed a rally this week due to the cooling crude and strengthening rupee, apart from other domestic factors, Gaurang Shah, head of investment strategy at Geojit Financial Services, told BloombergQuint over the phone.

“Investors will assess the elections for the next six-to-eight months while playing in the stock market,” Shah said, adding that inflows into mutual funds through systematic investment plans will aid the market.

Ashish Kelkar of investment adviser Kiran Jadhav & Associates said investors who hold long positions should continue with a trailing stop-loss, suggesting that they should not take any short positions. He expects Nifty to move around 10,820 and 10,980 next week.

Eight out of 11 sectoral gauges compiled by the National Stock Exchange advanced this week, led by the NSE Nifty IT Index’s 5.8 percent gain. On the flip side, the NSE Nifty Metal Index fell the most at 1.6 percent.

The NSE Nifty 500 Index also resumed its weekly rally. The gauge advanced 2.6 percent this week, led by the gains in 8K Miles Software Services Ltd., Vakrangee Ltd. and Prestige Estate Projects Ltd.

Rupee’s Best Weekly Gains Since January

The Indian rupee strengthened for the fourth straight week against the dollar, its longest weekly rally since January. The local currency ended at 69.58 against the greenback, its highest in over three months.

The rally in the home currency was led by falling crude oil prices, return of foreign investments and the dovish commentary from the U.S. Federal Reserve. The rupee was also the third-best performing emerging market currency.

Big Talking Points This Week

• GDP growth drops to 7.1% in the second quarter.
• Fiscal deficit reaches 103.9% of full year target in October.
• Jaguar Land Rover to pause production at U.K. engine plant.
• Moody’s downgrades Yes Bank on corporate governance concerns.
• Yes Bank’s Rana Kapoor unlikely to contest for chairman job.
• Yes Bank’s promoter groups divided over “truce”.
• RBI eases hedging requirements for foreign loans.
• Adani to self-finance controversial coal mine in Australia.
• Power industry too stressed to increase capacity, says JSPL.
• Amazon beats Flipkart to become India’s largest online retailer by gross sales.
• Amazon is adding more India retailers to its shopping cart.
• Lupin CFO Ramesh Swaminathan quits.
• Powell sees solid economic outlook as rates ‘just below’ neutral.
• U.S. economy grew at unrevised 3.5% pace in third quarter.
• RBI to infuse Rs 40,000-crore liquidity in December.

Don’t Forget

• What Indian unicorn founders earn.
• Board Failures: Five questions to ask on why boards are ineffective.
• Government to hive off Air India debt, ground unit into separate entity.
• BSE creates new division for listing of startups.
• Global economy may be slowing more than expected, Lagarde says.
• Deutsche Bank HQ searched in money laundering probe.
• SBI approves stake sale in general insurance arm for Rs 482 crore.

Data To Watch

• Dec. 01: Most automobile manufacturers will report their monthly sales for November.
• Dec. 03: Nikkei India Manufacturing PMI for November.
• Dec. 03: Nikkei India Services PMI for November.
• Dec. 03: Nikkei India Composite PMI for November.
• Dec. 05: RBI Monetary Policy. Most economists tracked by Bloomberg expect the Monetary Policy Committee to keep repo rate and reverse repo rate unchanged at 6.5 percent and 6.25 percent respectively.
• Dec. 05: Current Account Balance for Q3. Bloomberg Estimates at -$20 billion.
• Dec. 07-08: Exit polls of all five state assembly elections.

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