Markets buck global trend, march higher for third day

On Friday, the benchmark Nifty was up by 90.20 points or 0.95% to close at 9,580.3. The 30 share index Sensex was up by 223.51 or 0.69% to close at 32,424.1.

Indian stocks ended the week on a high on Friday as benchmark indices traded in the green for the third straight session with Sensex and Nifty rising by 6%. On Friday, the benchmark Nifty was up by 90.20 points or 0.95% to close at 9,580.3. The 30 share index Sensex was up by 223.51 or 0.69% to close at 32,424.1.

Indian equity markets bucked the global trend, which was negative on the rising geopolitical tensions between the United States and China. The tensions have been rising between the two economic giants because of China tightening conditions over Hong Kong which could threaten its autonomy.

Most Asian markets recorded a sombre day with markets in South Korea and Taiwan trading flat. Interestingly, Shanghai Composite, China’s benchmark was up by 0.2% whereas Hong Kong’s Hang Seng was down by 0.7%. European markets were trading in the red with bourses in the United Kingdom, Germany and France down between 0.89% to 1.47%, respectively. The Dow Jones Mini futures were down by 150 points at the time of press.

According to market experts, Indian markets could be up because of the momentum that the markets have had since the last few trading sessions. Rusmik Oza, executive vice-president, head of fundamental research, Kotak Securities, said, “The Indian equity markets are catching up with the rally seen in the developed markets.

Some bit of short covering, especially in banking stocks during F&O expiry has also fueled the rise. The undercurrent in Nifty looks quite strong which can take it closer to 10,000 unless the developments on the US-China turn uglier.”
The markets were also up ahead of GDP numbers that were released after market hours. The GDP for the March quarter stood at 3.1% which was at a 11-year low.

According to Dhiraj Relli, managing director and chief executive officer, HDFC Securities, “The Q4FY20 GDP number came in better than expected at 3.1% (11 year low) though the downward revision in the previous three quarters takes away some of that relief. The poor data on growth of India’s eight infrastructure sectors contracted by a record 38.1% in April led by cement, steel, electricity and coal was partly on expected lines. However, this data does not portend well for Q1FY21 unless we see a fast and complete lifting of lockout with safeguards in place.”

The foreign portfolio investors (FPIs) bought stocks worth $193.36 million and domestic institutional investors were up by $129.2 million. So far, foreign portfolio investors have pulled out $963.38 million worth of stocks till May 27. Interestingly markets seem to recover at a time when the FPI holding in the Nifty-500 is the lowest in five years, according to a report by Motilal Oswal Institutional Equities. In March FPIs sold stocks worth $8.3 billion which continues in April where they sold stocks worth $30.54 million.

The F&O segment saw volumes of Rs 7.72 lakh crore against the six month average of Rs 14.42 lakh crore. The cash market saw volumes worth Rs 83,496.84 crore against the six month average of Rs 40,898 crore. The biggest gainers on Nifty were Indian Oil Corporation, Wipro, ONGC, Coal India and Dr Reddy’s Laboratories which were up by 7.46%, 6.30%, 5.14%. 5.04%, and 4.43%. On the other hand, the biggest losers on Nifty were Axis Bank, Bharti Airtel, Adani Ports and SEZ, Tata Consultancy Services, and Titan which were down by 2.31%, 2.28%, 1.45%, 1.17% and 1.05% respectively.

Sectorally, the biggest gainers were Nifty Realty, Nifty Pharma, Nifty FMCG, Nifty Auto, and Nifty Metal. On the other hand, the biggest losers were Nifty IT and Nifty Media. The broader markets outperformed the gains made by Nifty with the midcap index, Nifty midcap ending the day 1.09% higher. Nifty smallcap ended the day 0.86% higher.