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Equity indices up for 7th session

Strong macro data revealing steady upside in Index of Industrial Production or IIP at 7.1 per cent for February and…

Equity indices up for 7th session

Bombay Stock Exchange. (File Photo: IANS)

Strong macro data revealing steady upside in Index of Industrial Production or IIP at 7.1 per cent for February and softening of consumer price index related inflation at 4.28 per cent in March from 4.44 per cent in the previous month reaffirming accelerating economic growth boosted bullish sentiment in Dalal Street on Friday.

Bombay Stock Exchange and National Stock Exchange bellwethers extended gains for the seventh day running on broad-based rally mainly driven by IT stocks as Infosys Technologies readied to announce its January-March or Q4 earnings later in the afternoon.

The global ambience also perked up following US President Donald Trump’s tweet that he was not in a hurry to attack Syria and risk a face-off with Russia in the near future.

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This boosted the American share market and extended the positive-bullish spell across Asia-Pacific exchanges.

However, in the last hour’s trade indices slipped from their intra-day high on a spell of profit booking which analysts say is “normal” for the week’s final business session in Dalal Street.

Speculators booked profit by hammering bank shares. Investors also wanted to see how the earnings season unfolds.

Experts, however, predict Q4 will be a better season for IT, auto and retail shares while banks and pharma companies are likely to disappoint.

The 30-share Sensitive Index of BSE and 50-scrip Nifty of NSE rallied for the seventh straight session regardless of accelerating crude oil prices owing to the Syrian crisis.

Analysts say the market is looking ahead to how India and China, both largest oil consumers — and importers — of fuel come together and make a case for “fair import” cost when the two Asian countries start talks with crude oil producers in the Arab world.

Market analysts say it would be the first ever attempt at bargaining by two countries jointly. Brent Crude futures has hit $72/barrel but it failed to dent market’s confidence as was obvious from steady upside in BSE and NSE benchmarks.

The Sensex closed for the week at 34,192.65 (+91.52) points up 0.27 per cent. Nifty of NSE increased 0.21 per cent ending 10,480.60 (+21.95) points.

Nifty Bank traded in the green on account of gains posted by private lenders. Nifty PSU Bank, however, was in the red. Nifty Bank trimmed intra-day gains to end 0.02 per cent up at 25,200.60 (+5.50) points.

Nifty PSU Bank was down 0.48 per cent at 2,941.20 (-14.15) points. In Sensex 18 shares ended up and 13 were down. For Nifty it was 26:23:1. Day’s highs for Sensex and Nifty were 34,313.14 (+212.01) points and 10,519.90 (+61.25) points respectively.

Market participants , analysts say, are picking up stocks more judiciously apparently after taking into consideration valuations unlike the buying spree they were on a few months ago or until January-end.

The indices then flourished on liquidity glut. Mutual funds with massive AUMs or assets under management were pouring in retail investors’ domestic earnings into equity market which took Sensex to record 36,443,98 points and Nifty to 11,171.55 points on 29 January.

Having suffered nearly 10 per cent correction disrupting the longest bull rally witnessed by Dalal Street, the indices are again climbing but now on improving fundamentals and not necessarily on money flows, point out veteran brokers in Dalal Street.

Statistics with NSE suggest foreign portfolio investors or FPIs have turned net buyers for the first time in April as they bought domestic shares worth Rs. 362.30 crore and Rs. 368.90 crore on 11 and 12 April. But they remain net sellers in equity in April with Rs. 2,953.80 crore withdrawals. DII on the other hand are net buyers of Rs. 3,322.08 crore.

Domestic funds booked profit on Thursday selling Rs. 818.88 crore worth shares. Analysts point out the asset under management of domestic mutual funds in March when the indices corrected had declined to Rs. 21.36 lakh crore from Rs. 22.20 lakh crore in February.

The slowdown in investment by DIIs or MFs was on account of implementation of long term capital gain or LTCG Tax on Rs one lakh profit that took effect on 1 April.

LTCG Tax, analysts say, would curb MFs’ splurging on equities across all segments. Top gainers in BSE benchmark included Wipro Rs. 292.10, 1.85 per cent; Kotak M Bank Rs. 1,150.50, 1.69 per cent; RIL Rs. 938.60, 1.19 per cent; and Dr Reddy’s Lab Rs. 2,053, 1.18 per cent.

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