Sensex posted its first weekly gain in the new year on the back of fresh buying and drop in inflation numbers, which fuelled hopes of RBI easing interest rates in the upcoming policy meeting.
The benchmark S&P BSE Sensex snapped the two-week losing streak and surged 305 points to end the week above 21,000. Bourses had a subdued beginning of 2014, which will see general election, a development that will be keenly watched by market players.
Fresh foreign fund inflows in equities also boosted the market sentiment. FIIs invested a net of Rs 1,577.97 crore in stocks during the week, as per the Sebi's data, including the provisional figure of January 17.
Weaker-than-estimated US employment data, released last Friday, cheered global financial markets, as investors feel the Federal Reserve may not now accelerate the pace of reduction of its monthly bond purchases.
Inflation, as measured by the Wholesale Price Index (WPI), declined to a five-month low of 6.16% in December.
Shares of capital goods, refinery and banking sectors firmed up on good buying enquiries.
Infosys stock rose 5.05% after the company raised its revenue growth guidance for the current fiscal year.
However, Bharti Airtel fell 5.98% on concerns Reliance Jio's participation in the upcoming spectrum auction may hurt the top telecom firm's marketshare and profitability.
The 30-share S&P BSE Sensex resumed strong and touched a high of 21,379.29, the second-highest intra-day level after touching 21,483.74 on December 9. However, it fell afterwards to end at 21,063.62, still showing a gain of 305.13 points, or 1.47%, from its last weekend's level.
The Sensex had dropped 435.09, or 2.05%, in the previous two weeks.
The NSE 50-share Nifty also rose by 90.20 points, or 1.46% to finish at 6,261.65. It had also dropped by 142.35 points, or 2.25%, in the previous two weeks.
Jignesh Chaudhary, head of research, Veracity Broking Services said, "Indian equity markets started with a bang, trading up by more than 350 points, tracking some positive trading by the FII community who have shared their fears as some not so good economic data limited Fed further action on the tapering process. This positive momentum was also buoyed by decline in inflation numbers."
"However markets started losing its winning streak in the middle of the week tracking weak Asian markets and weak Global equities. Positive trading was also hampered due to profit booking seen in few large cap stocks. The markets are keenly awaiting the interest rate decision by RBI schedule to be declared on Monday, 28th of January 2014. We expect Sensex to trade in the range of 20620 to 21700 and Nifty to trade in the range of 6150 to 6350 levels in the coming week," he added.
21 scrips out the 30-share sensex pack ended higher while nine finished lower. Other gainers were Bhel 5.22%, Cipla 4.80%, HDFC 4.75%, Larsen 4.72%, RIL 3.23%, SSLT 2.09%, Hero Motocorp 1.97%, HUL 1.58%, Bajaj Auto 1.52%, Gail India 1.45%, ONGC 1.30%, Dr Reddy's Lab 1.14% and ICICI Bank 1.02% while Coal India dropped by 5.52%, TCS 2.90%, Sun Pharma 2.55%, Tata Power 2.49%, Tata Steel 1.76% and Axis Bank 1.01%.
Among the S&P BSE sectoral indices, CG rose by 2.90%, Oil&Gas 2.64%, Bankex 1.15% and IT 0.88% while CD 2.28% and Realty fell by 1.61%.
Second-line stocks underperformed the Sensex on selling by retail investors. As a result, S&P BSE-Midcap and Smallcap indices dropped by 1.42% and 1.43% respecetively.
The total turnover at BSE and NSE fell to Rs 10,799.08 crore and Rs 54,563.44 crore respectively during the week as from its last weekend's level of Rs 11,663.44 crore and Rs 59,964.52 crore.
Forex: In a lacklustre trade throughout the week, the Indian rupee appreciated for the second week in a row by 36 paise to close at 61.54 against the greenback following continued dollar selling by exporters amid firm local stocks.
Sustained capital inflows and better dollar overseas also aided the rupee rise.
The Forex market was closed on Tuesday, January 14, for observing Id-E-Milad.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 61.52 a dollar from previous weekend's close of 61.90 due to smart rise in local stocks, where the benchmark S&P BSE Sensex on Monday spurted by 375.72 points or 1.81% to log its biggest gain in seven weeks.
The rupee was also supported by weakness in the USD overseas after disappointing US jobs data announced last weekend eased concerns about the Federal Reserve's tapering of the stimulus programme, a forex dealer said.
Later, it moved in a range between 61.3175 -more than one month intra-day high- and 61.7150. Last three days of the week, the rupee closed with small changes either side on alternate bouts of demand and supply. It, finally, closed at 61.54, showing a rise of 36 paise or 0.58%. Last week, it has gained 26 paise or 0.42%.
The Indian benchmark S&P BSE Sensex flared up by 305.13 points or 1.47% during the week while FIIs injected $244.11 mln on first four days of the week, as per Sebi data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Not much action was seen in the currency market. Rupee traded range bound while local equities closed higher. Foreign fund inflows in the bond market helped Rupee to rise and on the other hand, dollar index traded strong as a run of mixed US economic data left the market uncertain about its future direction which forced rupee to close near its previous close. The trading range for the spot rupee is expected to be within 61.00 to 62.00."
"USD strengthened against majority of its counterparts as improvement in retail sales, PPI and ISM manufacturing once again fuelled hopes that US economic recovery is sustainable, signalling additional tapering of monthly monetary asset purchases in the upcoming FOMC meeting, scheduled for January 28-29. Euro region currency witnessed negative news this week as the strongest nation in the region, Germany, witnessed a downtick in their GDP numbers on Wednesday. The Euro region currency weakened after the release," he added.
Meanwhile, inflation as measured by the Consumer Price Index (CPI) dropped to a three-month low of 9.87% in December from 11.16% (revised) in November.
Headline inflation, as measured by the Wholesale Price Index (WPI), also dipped to a five-month low of 6.16% in December from 7.52% in November, raising hopes of a rate cut by the Reserve Bank of India later this month to boost sagging economic growth.
The rupee premium for the forward dollar declined further due to persistent receipts by exporters.
The benchmark six-month forward dollar premium payable in June slipped to 224-1/2-226-1/2 paise from last weekend's close of 231-233 paise and far-forward contracts maturing in December also fell to 459-461 paise from 466-468 paise.
The RBI fixed the reference rate for the US dollar at 61.3518 and for the euro to 83.5223 from 61.9360 and 84.3050 last weekend, respectively.
The rupee remained firm against the pound sterling to 101.22 from last weekend's close of 101.65 and also edged up against the Japanese yen to 58.94 per 100 yen from previous weekend's close of 58.96.
It too hardened further against the euro to 83.71 from preceding weekend's close of 84.17.
Oils and oilseeds: Edible and non-edible oils ended mixed in an otherwise truncated oils and oilseeds market during the week under review.
Groundnut oil recovered smartly on fresh demand from stockists and retailers in the midst of festival demand.
While, refined palmolein eased marginally on subdued buying support from retailers.
Linseed oil firmed up on good demand from paint and allied industries.
Castorseeds bold and castoroil commercial declined moderately on subdued demand from shippers and soap manufacturers.
The oilseeds markets was closed on Tuesday, 14th January for 'Makar-Sankaranti'.
In the edible oils segment, groundnut oil opened stable at Rs 780, later spurted to finish at Rs 800 from previous weekend level of Rs 780 per 10 kg, showing a gain of Rs 20.
Refined palmolein also opened steady at Rs 568 and drifted further to close at Rs 566 from preceding weekend's level of Rs 568, showing a marginal loss of Rs 2 per 10 kg.
In the non-edible section, castorseeds bold opened stable at Rs 4,100, but later moved down to end at Rs 4,090 from last weekend's level of Rs 4,100, showing modest loss of Rs 10 per 10 kg.
Castoroil commercial also resumed unchanged at Rs 850, later softened to conclude at Rs 848 from preceding weekend's level of Rs 850, showing a marginal loss of Rs 2 per 10 kg.
Linseed oil opened steady at Rs 830, later advanced to close at Rs 835 from its last weekend level of Rs 830, showing a gain of Rs 5 per 10 kg.