Market Wrap: Dalal Street snapped a three-week losing streak amid easing concerns around stress in banking sector

Snapping a three-week losing streak, Indian equity benchmarks ended this week with a gain of two and a half per cent each tracking firm cues from global markets led by easing concerns around stress in the banking sector and ahead of the US inflation update. In the domestic market, in its quarterly economic update for Asia-Pacific, S&P saw the inflation rate in India easing to 5 per cent in 2023-24 fiscal from 6.8 per cent. Some support also came after the Reserve Bank of India stated that India’s forex kitty rose by $12.798 billion to $572.801 billion in the week ended March 17.

Buying in the final two days of this week helped markets to snap the week with significant gains as traders took encouragement from Commerce and Industry Minister Piyush Goyal’s statement that the country’s merchandise and services exports are estimated to cross $760 billion in the current fiscal ending March 31. These signals led the BSE Sensex to surge 1,464 points, or 2.55 per cent, at 58,991.5 during the week ended March 31, while the Nifty gained 415 points, or 2.45 per cent, to 17359.8.

Deepak Jasani, Head of Retail Research at HDFC Securities, said: “Nifty broke out upwards on March 31 aided by positive global cues and year-end buying. At close, Nifty was up 1.63% or 279.1 points at 17359.8. Volumes on the NSE were a little higher than the recent average. Indian markets outperformed all other Asian markets for the day. Global stock markets edged higher Friday, with investors assimilating mixed Chinese activity ahead of the release of key inflation data on both sides of the Atlantic even as the fears of a banking crisis waned.

Jasani Added “Morgan Stanley has upgraded India to equal-weight (EW), with the narrowing valuation premiums and a resilient economy. Nifty rose smartly on March 31 with an up gap (above the highs of the previous 4 sessions). 17451-17529 could be the resistance for Nifty in the near term while 17225 could be a support. Nifty rose 2.45% over the week – the largest weekly gain in 9 months. As we enter a new fiscal year, we may see some more gains before pre-Q4 results nervousness kicks in.” he said.

As many as 44 stocks in the Nifty 50 index delivered a positive return for investors in the week ending March 31. With a gain of 5.8 per cent, Reliance Industries emerged as the top gainer in the index. It was followed by IndusInd Bank (up 5.7 per cent), JSW Steel (up 4.7 per cent), Hindalco Industries (up 4.4 per cent), and Nestle India (up 3.9 per cent). State Bank Of India, Dr. Reddy’s Laboratories, Infosys, HCL Technologies, HDFC Bank, and Hindustan Unilever also advanced by over three per cent. On the other hand, Bharti Airtel, Asian Paints, and SBI Life Insurance Company declined 1.7 per cent, 1.3 per cent, and 1.2 per cent, respectively.

Sector-wise, the BSE Bankex index surged the most (3 per cent) during the week gone by. While BSE Metal, BSE Information Technology, and BSE Teck indices have registered a weekly gain of 2.6 per cent, 2.5 per cent, and 2.1 per cent, respectively. On the other hand, BSE Power has registered a weekly decline of 1.6 per cent.
Commenting on the market performance, Vinod Nair, Head of Research at Geojit Financial Services, said: “The cautious sentiment of investors due to the continued stress in the US and European financial systems resulted in a slow start to the week. However, the home market managed to draw a positive close to the financial year due to the fading fear of contagion. The banking sector was in the limelight, with the news of SVB’s acquisition by First Citizens Bank bringing some certainty. Additionally, the moderation in the valuation of Indian stocks attracted foreign investors back to buying mode. “he said.

Besides, Nair said “In India, investors are anticipating the outcome of the RBI MPC meeting scheduled for next week, as well as the release of auto sales numbers and PMI data. The RBI is expected to raise rates by 25bps. Meanwhile, in the US, the release of personal consumption expenditures data is awaited, as it is a crucial indicator for forecasting the Federal Reserve’s future actions.” he added.

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