GST, fund inflows restore upswing in Indian equity indices

By Porisma P. Gogoi

Mumbai, June 10 (IANS) Optimism over the approaching Goods and Services Tax (GST) execution, coupled with higher fund inflows and value buying helped key Indian equity indices to pare their losses and close on a marginally positive note during the week ended June 9.

Market observers pointed out that even as the markets corrected slightly throughout the week, investors did not lose any opportunity to buy in the highly expensive stock options.

On Friday, the 30-scrip Sensitive Index (Sensex) of the BSE closed at 31,262.06 points -- down 11.23 points or 0.04 per cent from its previous week's close.

In contrast, the NSE Nifty rose by 14.75 points or 0.15 per cent to close the week's trade at 9,668.25 points.

On June 5, the NSE Nifty closed at a record high of 9,675.10 points, while the Sensex closed at a new high of 31,309.49 points.

On June 6, the NSE Nifty crossed the 9,700 mark for the first time to touch a new high of 9,709.30 points during intra-day trade. The BSE Sensex, too, touched a record intra-day high of 31,430.32 points.

"Markets ended with nominal gains this week after trading in a narrow range. The Nifty nevertheless managed to close at new life highs on a weekly closing basis, ending with week-on-week gains of 0.15 per cent," Deepak Jasani, Head - Retail research, HDFC Securities, told IANS.

"The S&P BSE mid-cap index rose by 0.49 per cent and the S&P BSE mall-Cap index by 1.55 per cent. Both these indices outperformed the Sensex/Nifty."

According to market analysts, the Reserve Bank of India's monetary policy review and the British general elections were among the important events that kept investors guessing about the direction of market during the week.

"Throughout the week, traders and investors remained jittery amid multiple global events. Even upgrades in monsoon estimates and RBI's decision of keeping repo-rate and reverse repo-rate unchanged at 6.25 per cent and 6 per cent, respectively didn't bring any cheer to the market," said Vijay Singhania, Director, Trade Smart Online.

"The public sector banking stocks were in action on media reports which stated that the government was examining the possibility of further consolidation in the public sector banking space without waiting for their finances to improve. We saw a record response to State Bank of India's QIP (qualified institutional placement) issue."

Figures from the National Securities Depository revealed that foreign portfolio investors (FPIs) invested in a total of equities and debts worth Rs 8,844.11 crore, or $1.37 billion, during June 5-9.

Provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 601.38 crore, while domestic institutional investors (DIIs) purchased scrip worth Rs 883.31 crore during the week.

"This week the rupee gained strength against the US dollar due to sustained selling of the US currency by exporters and banks," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS while commenting on sector-specfic movement.

During the week, the Indian rupee strengthened by 19-20 paise to 64.24-25 against the US dollar from it's last week's close at 64.44.

Pointing out some other important events that affected market movement during the week, Desai said: "This week the Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector output on a monthly basis, rose from 50.2 in April to 52.2 in May."

"The GST Council on Saturday last week announced that the rate on gold and gold jewellery would be at 3 per cent, while the import duty of 10 per cent, which will be over and above the 3 per cent, remains unchanged. The IT sector witnessed substantial breakdown after Infosys's COO's comments of slowdown in the industry and pain in coming months."

Sectors that gained during the week include healthcare, consumer durables, metals, realty and banks, while oil and gas, power, FMCG and IT were the losers.

The top weekly Sensex gainers were: Maruti Suzuki (up 4.73 per cent at Rs 7,451), Cipla (up 4.04 per cent at Rs 550), Dr. Reddy's Lab (up 3.03 per cent at Rs 2,630.55), Tata Steel (up 2.99 per cent at Rs 506.30) and HDFC (up 2.16 per cent at Rs 1,644.85).

The losers were: GAIL (down 5.31 per cent at Rs 380.95), ITC (down 4.06 per cent at Rs 306.20), Wipro (down 2.75 per cent at Rs 536.75), NTPC (down 2.74 per cent at Rs 157.90), and ONGC (down 2.73 per cent at Rs 169.15).

(Porisma P. Gogoi can be contacted at porisma.g@ians.in)