Equities remain bullish over budgetary sops, strong rupee

Mumbai: The bull run at the Indian equities markets continued for the second consecutive week as sops announced in the Union Budget 2017-18, along with a strong rupee and inflow of foreign funds, buoyed investors` sentiments.

However, gains were capped on the back of mixed services sector data, concerns over US President Donald Trump`s foreign policy and caution ahead of the monetary policy review of the Reserve Bank of India (RBI) slated to be released next week.

The key indices closed with gains of more than one per cent each, even touching their new 2017 closing highs during the week.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 358.06 points or 1.28 per cent to 28,240.52 points. 

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 99.7 points or 1.15 per cent to 8,740.95 points.

"Markets rallied higher this week after some weakness was seen in the early part of the week. The Nifty bounced back and rallied higher on the back of the Union Budget announcements," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

Vijay Singhania, Founder and Director of Trade Smart Online brokerage firm, said: "Investors cheered Finance Minister Arun Jaitley`s Union Budget 2017-18, as no mention of long-term capital gains tax in the budget speech triggered buying across the market."

"Apart from the Budget, another highlight for the week was Asia`s oldest stock exchange -- BSE -- getting listed at a huge premium, closing the first trading day at Rs 1,070 on Friday -- a 32.7 per cent premium to the offer price," Singhania said.

Market observers pointed out that uncertainty over US President Trump`s policies continued to weigh heavy on the sentiments of market participants across the globe.

"Both the major central banks -- FOMC (Federal Open Market Committee) and the Bank of Japan (BoJ) -- kept their policy rates unchanged in the recent meetings. However, the US Fed`s relatively upbeat outlook suggested that it was on track to tighten monetary policy this year," D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.

"Chinese stocks derailed after the People`s Bank of China raised the interest rates on open market operations by 10 basis points amid growing concerns about President Trump`s aggressive policies."

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the Indian equities markets traded with firm sentiments as they tracked appreciation in the Indian rupee against the US dollar. 

The Indian rupee strengthened by 72 paise to 67.32 against a US dollar from last week`s close of 68.04.

"Some support also came with reports that growth in eight core sectors expanded at a faster pace of 5.6 per cent in December 2016, against the 4.9 per cent growth recorded in November 2016, supported by double-digit expansion in the steel sector," Desai pointed out.

"Furthermore, a private report highlighting that India is expected to clock GDP growth of 7.1 per cent in 2017-18, up from 6.3 per cent in 2016-17, as the country gets sufficiently remonetised and the schemes in the Union Budget played a supportive role."

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 629.64 crore, while domestic institutional investors (DIIs) bought scrips worth Rs 1,257.73 crore.

Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought a total of equity and debt instruments worth Rs 4,452.41 crore, or $656.14 million from January 30-February 3.

The top Sensex gainers of the week were: Bharti Airtel (up 8.83 per cent at Rs 352), ITC (up 5.81 per cent at Rs 272.45), Cipla (up 4.84 per cent at Rs 608.35), Dr.Reddy`s Lab (up 4.76 per cent at Rs 3,141.60) and the State Bank of India (SBI) (up 4.09 per cent at Rs 277.40).

The losers were: Tata Consultancy Services (TCS) (down 5.27 per cent at Rs 2,233.75), Tata Motors (down 4.01 per cent at Rs 522.50), NTPC (down 2.77 per cent at Rs 171.95), Wipro (down 2.02 per cent at Rs 456.70), and ONGC (down 1.76 per cent at Rs 200.95).