A 4% pop on St — first in 6 weeks

The Street logged its first weekly gain in six and the biggest since the week ended November 30, riding on positive global cues and the commitment of global central bankers to persist with accommodative monetary policy in the near future.

The benchmark Sensex on Friday rose 269.69 points, or 1.39%, to close the week at 19683.23, up 764.71 points, or 4.04%, for the week.

Though the week started on a cautious note, the next four sessions logged three-digit gains.

To be sure, even the US market posted gains of around 1.7% in the first four days to touch all-time highs, while the Nikkei gained 5.84% over the week to close at a 53-month high.

Vaibhav Sanghavi, director - equities at Ambit Capital, said the statements made by Ben Bernanke and Mario Draghi, along with a weakening of yen over the last few days, signified risk money coming back into global equities.

Foreign investors bought Indian equities worth over `3,000 crore (including Friday’s provisional figures) this week, compared with `832 crore in the week before.

Experts believe the markets also got a boost due to foreign flows resuming post-Budget.

“The markets were beaten down immediately after the Budget as expectations were probably too high, but people soon realised that the Budget had fiscal prudence and was investor friendly. With global markets, too, doing well, the Indian markets recovered sharply,” said Nitin Jain, head - retail capital market, Edelweiss Securities.

Post-Budget statements by the finance minister that the government will persist with reforms and expectations of rate cuts by RBI, too, seem to have lifted market sentiment.

Interest rate sensitive sectors like realty, banking and capital goods were the top gainers rising 7.40%, 5.57% and 5.33% this week.

Experts see the markets consolidating in the near term, ahead of the RBI’s March 19 meet. According to them, a 10-15% return over the next one year should be par for the course.

Goldman Sachs on Friday reiterated its overweight stance on Indian equities in the medium term, maintaining the Nifty target at 7000 with a 12-month perspective.

“Recent current activity indicator and PMI indicators suggest growth has troughed, suggesting the macro cycle is turning. From a relative perspective, India is the third least expensive market in Asia-Pacific ex-Japan based on 10-year historical P/E & P/B z-scores. In the near term, an RBI cut on March 19 or firmer IP print may give confidence that the growth cycle is turning,” the Goldman analysts said in a note.

Vaibhav Sanghavi, too, believes the markets may deliver 10-15% returns in line with earnings growth next fiscal.

@nitinpshri