Benchmark equity indices BSE Sensex and NSE Nifty extended their gains for the third straight week on account of continued buying by foreign institutional investors, softening commodity prices amid robust macroeconomic data. The 30-share Sensex advanced 1.42 per cent to 58,387.93 on August 5 from 57,570.25 on July 29. Likewise, the 50-share Nifty index gained 1.39 per cent to 17,397.50.
Government data showed that the output of eight core infrastructure sectors expanded by 12.7 per cent in June against 9.4 per cent in the year-ago period. Sentiments remained upbeat as India’s manufacturing sector activity gained momentum in July, hitting an eight-month high driven by a significant uptick in business orders.
As many as 36 stocks in the Nifty index delivered a positive return to investors last week. With a gain of 6.14 per cent, Mahindra & Mahindra emerged as the top gainer in the index. It was followed by Adani Ports (up 6.10 per cent), JSW Steel (up 5.96 per cent) and Cipla (up 5.81 per cent). Power Grid, Infosys, Asian Paints and Wipro also advanced by over 3 per cent. On the other hand, Britannia, Tata Consumer and HDFC Life declined 5.44 per cent, 3.31 per cent and 2.93 per cent, respectively.
Vinod Nair, Head of Research at Geojit Financial Services said, “Despite the rate hike being on the higher side of the expectations, the market welcomed the RBI’s move of 50 basis hike with rising bond yields. Even though metals prices are softening, RBI decided to keep FY23 inflation targets unchanged at 6.7 per cent, which is above the tolerance level. However, given that Q3 and Q4 inflation is anticipated to be between 4.0 per cent and 4.1 per cent, the market is hopeful for the future.”
Sectorwise, the BSE Teck index gained 3.05 per cent during the week gone by. BSE IT, Power, Auto and Oil & Gas indices also rallied over 1 per cent each. In contrast, the BSE Realty and Capital Goods index retreated 2.93 per cent and 0.06 per cent, respectively.
In the forthcoming week, market participants would be eyeing the data of the Index of Industrial Production (IIP), which is scheduled to be released on August 12, Industrial production in India jumped 19.6 per cent year-on-year in May of 2022, advancing sharply from a downwardly revised 6.7 per cent rise in the previous month. On the same day, Consumer Price Index (CPI) for May also be released. Consumer prices in India increased 0.52 per cent from a month earlier in June of 2022, after a 0.94 per cent advance in May.
Further, in the ongoing earning season, investors would first react to the results of Amara Raja Batteries, Birla Corporation, BPCL, Hindpetro, Indian Overseas Bank, Marico, MGL, State Bank Of India, Adani Ports, Bharti Airtel, IRCON International, Power Grid, IDFC, IGL, MRF, NCC, Tata Chemicals, Abbott India, IRCTC, Oil India, SAIL, Tata Consumer Products, Bajaj Electricals, Grasim Industries, HAL, Hero MotoCorp and ONGC, among others.
Apurva Sheth, head of market perspectives, Samco Securities said, “On a macroeconomic front, the upcoming week is expected to be jam-packed for investors. The global markets are likely to dance to the tune of the Inflation figures to be released by the United States and China. Back home, market players will turn to the Indian CPI print for hints about the economy’s trajectory.”
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