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Weekly wrap: Sensex, Nifty beat global peers on RBI boost, macro data

17:55

Manu Kaushik

CNBC-TV18

After trading sideways for better part of the week, benchmark indices spiked on Thursday boosted by a surprise 25bps repo rate cut surprise by the RBI.

For the week, Sensex and Nifty closed at 28,122 and 8514 respectively with a 2.4-2.8 percent bump as compared to last week’s closing levels.

UltraTech, HUL, ACC, IDFC, BHEL, HDFC, Ambuja Cements, Zee Ent and DLF which spiked 6-11 percent emerged top Nifty gainers of the week.

HUL which rallied massively this week is on the sell list of CLSA with a price target of Rs 650. The counter has been rallying as a steep fall in crude prices is seen benefiting the company’s profit margins by way of lower raw material costs.  

Benchmarks indices marginally outperformed the broader markets; BSE small-cap and CNX mid-cap indices gained 1-2.2 percent.

The top performers in the mid-cap space which gained 13-39 percent this week are: Hind Dorr, Prism Cement, India Cements, Thomas Cook, Maxwell Ind, Sun TV, HMT, I-bulls, Hsg Fin, DHFL up 14-39 percent. 

The rally was primarily led by rate sensitive sectors such as banks, realty and capital goods. Other than rate cuts, macro economic data released during the week also lifted the sentiment. Industrial production as measured by the IIP index, for the month of November expanded by 3.8 percent and CPI inflation stood at 5 percent, well within RBI’s target. 
Realty, capital goods and PSU Bank indices surged 3.4-6 percent higher led by the central bank’s surprise 25 bps rate cut ahead of monetary its policy review in February.

Global fears

According to provisional data, foreign investors bought shares worth Rs 3248.47 after being net sellers last week. This shows foreigners are resilient on the Indian market despite weakness globally. But local investors preffered to cash out after buying for most of January; DIIs sold stocks worth Rs 1753.28 this week.  

After Grexit fears -exit of Greece from the EU-  that sparked a sell-off earlier in January, a swiss shocker roiled global markets on Thursday. The central bank of Switzerland scrapped the cap on swiss Franc’s exchange rate against the euro triggering volatility in credit and currency markets globally. Swiss Franc spiked 30 percent intra-day ahead. 

Investors globally will keenly watch the outcome of ECB’s monetary policy next week. The central bank is widely expected to expand its asset purchase program to stave off deflation that has gripped the region.

Market Internals

Among sectors metal index was the sole loser; Metal stocks came under heavy selling pressure after copper fell to five-and-a-half year lows on the LME on Wednesday after the World Bank revised global growth downwards. Continued weakness in oil prices also exacerbated fears of demand sluggishness and subdued outlook for the world economy.  

CNX Metal index fell over 4 percent this week; Sesa Sterlite, Hindaclo and Tata Steel fell 4-11 percent and also fared among the top Nifty losers.

CNX Media led the gains in sectors with a 5.6 percent upmove this week; from the pack Zee News rose 7 percent. CEO Ashish Kirpal Pandit of Zee Media Corporation Ltd told CNBC-TV18 that the company plans to launch a business news channel.

Other than macro-economic data and global events, September-December quarter corporate earnings also dominated the headlines during the week.

IT behemoths TCS and Infosys announced their third quarter earnings results this week. Infosys beat the street on many fronts, including rival TCS in terms of volume growth after eight quarters. TCS results were however muted.

Another newsmaker this week was Spicejet; the beleaguered budget carrier announced its decision to transfer the ownership, management and control of the company to founder Ajay Singh from Sun Group chairman Kalanithi Maran and Kal Airways. Maran and Kal together held 53.5 percent in Spice while Singh had 4.5 percent stake. The stock spiked over 10 percent to close at Rs 20.50 on Friday.

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