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Sify Editors @ 10:30 AM
Weekly Wrap: Sensex, Nifty50 record new all-time highs as blue chips rally
Mostly steady global markets after the first round of French Presidential Election results saw free trade supporter Emanuel Macron emerging the winner with about 24% of the vote, and optimism about Indian economic growth drove stock prices up and lifted the benchmark indices Sensex and the Nifty50 to new all-time highs in the week ended 28 April 2017.
The BSE benchmark Sensex ended the week at 29,918.40, with a gain of 553.10 points or 1.88%. On Thursday, the Sensex hit a new all-time high of 30,184.22. The Nifty50 of the National Stock Exchange, which scaled a new high at 9367.15 on Thursday, ended the week at 9304.05, gaining 184.65 points or 2.02%.
Midcap and smallcap stocks weakened during the latter part of the week. Still, the BSE Midcap and Smallcap indices added 2.14% and 1.35% by the end of the week.
The market began the week on a buoyant note with scores of stocks from across large, midcap and smallcap segments hitting new peaks on Monday, as traders indulged in hectic buying at several counters, with the first round victory of Emmanuel Macron in the French presidential election prompting them to go for riskier assets. Cement stocks were among the most impressive gainers in the first session of the week, amid optimism about demand growth. The Sensex ended up 290.54 points and the Nifty50 gained 98.55 points on that session.
On Tuesday, strong global cues and better-than-expected fourth quarter results from Reliance Industries set up a buoyant start for stocks, and stocks gained in strength as the session progressed. Reliance Industries gave up early gains and ended just modestly higher, but the overall mood was so bullish that the market quite easily sailed to an upbeat close. The rupee's strength, improved sentiment in global markets following the results of the first round of French presidential election that resulted in a victory for markets favourite Emmanuel Macron, aided the rally. The Sensex and the Nifty50 gained 287.40 points and 88.65 points, respectively.
The Sensex and the Nifty50 hit new peaks and ended notably higher on Wednesday, extending gains to a third successive day, as positive global cues, the rupee's impressive gains against the U.S. dollar and better-than-expected results from Wipro aided sentiment. The Sensex ended stronger by 190.11 points, while the Nifty50 gained 45.25 points. 9351.85
After three successive days of gains that saw the key indices Sensex and the Nifty50 scale record highs, the market took a breather of sorts on Thursday, with investors taking some profits, digesting a mixed batch of quarterly earnings reports.The Sensex ended down 103.61 points, while the Nifty50 netted a loss of 9.70 points.
On Friday, trading was lackluster for almost the entire session, with investors treading cautiously and indulging in more profit taking. A somewhat disappointing batch of economic data limited Wall Street's upside on Thursday, and most of the markets across Asia and Europe stayed quite sluggish on Friday, and this rendered price movements quite sluggish in the Indian market. The Sensex ended down 111.34 points and the Nifty50 declined 38.10 points.
Bank and automobile stocks had a good week. A stronger rupee weighed on information technology and healthcare stocks.
The banking space saw some good buying on Tuesday following remarks by the central bank governor Urjit Patel about ways to resolve the problem of stressed assets of banks. Speaking at the Columbia University, the Reserve Bank of India governor said that the central bank favoured consolidation of some public sector banks to create fewer but healthier banks and resolve the problem of stressed assets.
Axis Bank ended the week stronger by nearly 5%, despite seeing a weak spell towards the end of the week after reporting a more than 40% decline in net profit in the quarter ended March 2017. Kotak Mahindra Bank (1.6%) ended higher on strong quarterly results.
IDFC Bank reported after market hours on Tuesday that it posted a net profit of Rs 175.95 crore in the quarter ended March 2017, up 6.57% compared to year-ago quarter. The bank's gross non-performing assets in the March 2017 quarter declined 57% sequentially to Rs 1542.1 crore. Gross NPAs were Rs 3586.7 crore in the previous quarter. The bank's asset quality improved to 2.99% for the quarter, as against 7.03% a quarter earlier. Net NPAs improved from 2.57% in the December 2016 quarter, to 1.14% in the March 2017 quarter.
The sharp improvement in asset quality was due to the bank selling fourteen large corporate loans worth Rs 2000 crore to Asset Reconstruction Companies. Provisioning for bad loans dropped down by as much as 98% on sequential basis, toRs 4.79 crore.
Asian Paints gained about 5.5%. Bharti Airtel advanced 3.3% and GAIL India gained 5.8%. Power stock NTPC shed about 1.6%. ONGC saw hectic buying on Friday on reports that the company made 23 oil and gas discoveries in the fiscal year ended March 31 as a record number of wells drilled helped it uncover new reserves. ONGC's Chairman and Managing Director DK Sarraf said that the company is planning to bring on stream its Kutch offshore basin, the country's eighth new basin, over the next 2-3 yars.
In the automobile space, Bajaj Auto added 1.7%. Mahindra & Mahindra gained nearly 6.5% thanks to a rating upgrade of the stock by a foreign brokerage. Maruti Suzuki ended 5.2% up, with strong results aiding its surge. Maruti Suzuki posted a net profit of Rs 1709 crore in the quarter ended March 2017, up 15.8% over the year-ago quarter. The company attributed the increase in profit to growth in volumes, increased share in its higher segment models, full capacity utiliszation and cost reduction efforts.
Among pharma majors, Cipla ended 1.1% down. Dr Reddy's Laboratories edged down marginally, while Lupin declined by about 5%.
Reliance Industries, despite some bright spells in positive territory, ended the week with a modest loss. Reliance Industries reported consolidated net profit of Rs 8046 crore for the quarter ended March 2017, up 16.6% compared to year-ago quarter. Turnover was up 45.2% at Rs 92,889 crore in the fourth quarter. Increase in prices of refining and petrochemical products helped lift revenues in the March 2017 quarter and stellar growth in retail business contributed to the surge in turnover. Reliance Industries' gross refining margin increased to $11.5 per barrel in the fourth quarter, up from $10.8 per barrel in the previous quarter as well as the year-ago quarter.
Infosys declined marginally. Wipro ended slightly up. Wipro came out with better than expected fourth quarter results and also announced a 1:1 bonus issue. However, weak revenue guidance for the first quarter of the current fiscal weighed on the stock. Among other IT majors, Tata Consultancy Services ended lower by 1.7%, Tech Mahindra declined nearly 3% and HCL Technologies ended 2.3% down.
Indiabulls Housing Finance hit a new peak on strong results and the company's fund raising plans. Strong results, liberal dividend lift steer Swaraj Engines to new all-time high. LIC Housing Finance company shares rose to a new high, riding on strong quarterly results.
Biocon reported revenues of Rs 974.3 crore for the January - March 2017 quarter, as compared to Rs 972.7 crore in the corresponding quarter of the previous year. The company said that its fourth quarter performance was impacted by the fire at Syngene. Although the result fell short of expectations there was something to cheer about for the company's shareholders, as its board declared a bonus of 2:1 (two shares for every share held). A final dividend of Rs 3 per share was declared as well.
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