The markets gained over 2% this week, maintaining their positive run for the sixth straight week as foreign institutional investors (FIIs) continued to pump money, helped by positive global cues.
Heavyweights led the rally as the Sensex outperformed the mid-cap (up 0.94%) and small-cap (up 0.74%) indices on the Bombay Stock Exchange (BSE), which rose 411.61 points, up 2.4%.
All the sectoral indices ended the week on a positive note, except for realty, which fell 1.39%.
Major sectoral gainers were metal (up 3.65%), oil & gas (up 3.51%), telecom (up 3.44%) and IT (up 3.28%).
The week started with advance tax numbers coming in on Monday, which were good and in line with expectations.
At the global level, the assurance of European Union finance ministers of support to Greece if needed and the US Fed’s pledge to keep interest rates in the current 0-0.25% range helped sentiments.
S&P re-rating India from “negative” to “stable” was further reassuring for global investors.
Foreign institutional investors (FIIs), who had bought shares worth Rs 3,613 crore as of Thursday this week, added Rs 284.25 crore on Friday, provisional stock exchange data shows.
FIIs have pumped in more than Rs 15,000 crore in 15 straight sessions since the budget day.
Reliance Industries was the top gainer among Sensex stocks, rising 6.9% this week, as foreign investors lapped up the stock on better outlook for refining margins.
Failed acquisition bids for Lyondell and Canadian firm “Value Creation” also helped the cause.
“We expect bumper Q4 profits for Reliance. The outlook for gross refining margins is looking good close to $9/bbl,” said Deven Choksey, MD of KR Choksey Securities.
Market experts say the high-beta metal sector was helped by the fact that the US Fed did not announce a rate hike, meaning the dollar and consequently commodity prices would remain stable.
Also, though the cost of raw materials is expected to go up, steelmakers would be able to pass on the price hikes.
Hindalco (up 6.39%), Tata Steel (up 6.04%) and SAIL (up 5.59%) were the major winners this week.
Telecom stocks such as Idea Cellular (up 14.18%), Reliance Communications (up 6.63%) and Bharti (up 4.3%) bounced back from oversold zone.
However, experts feel the markets are unlikely to rally much from here, considering they are trading at the upper-end of the range.
Meanwhile, the Reserve Bank of India (RBI) hiked key interest rates— the repo and reverse repo — by 25 basis points (bps) each after market hours on Friday.
This could to have a negative impact on the markets.
Though it had factored in rate hikes in April, the sudden move could prove a dampener.
Experts feel, together with inflation, the rate hikes will cap the uptrend in the short term. “Markets may be rangebound in the coming two weeks, with 5300-5320 acting as strong resistance.” Choksey said.
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