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Sensex rises for third week, rupee continues upward march

Despite fag-end selling pressure, the BSE Sensex ended in the green for the 3rd consecutive week, while the rupee continued its upward march against the dollar, rising by 176 paise to close at 63.48.

business Updated: Sep 14, 2013 20:52 IST

Despite fag-end selling pressure,both the indices, S&P BSE Sensex and CNX Nifty, ended in the green for the 3rd consecutive week on persistent buying by foreign funds on a host of positive factors such as sustained gains in the rupee and easing tensions over Syria.

Sustained foreign capital inflows boosted the market sentiment as FIIs invested a net Rs 4,112.10 crore during the week, including the provisional figure of September 13. FII buying was also driven after the RBI allowed non-residents to buy shares of Indian entities listed on stock exchanges under the FDI scheme, subject to certain conditions.

The threat of immediate US-led military action against Syria appeared uncertain, with Washington saying it will consider Russia's call for Syria to turn over its chemical weapons to international control, which also helped Sensex to rise.

Shares of Realty, Capital Goods, Power, Auto, metal and FMCG sectors firmed up on good buying enquiries.

Apart from the rupee's gains, investors were buoyed by trade data that showed exports on the uptick for the second straight month in August, a revival in car sales last month and a cut in the floor price for auctioning telecom spectrum.

The Sensex resumed higher at 19,448.39 and breached the 20,000 mark for the first time since July 25 and gained by 727.04 points or 3.77 % on Tuesday.

It was the biggest gain in absolute terms since the Sensex surged 2,110.79 points, or 17.34 %, on May 18, 2009, when the UPA government came to power for the second term.

However, it ended the week at 19,732.76, showing a gain of 462.70 points or 2.40 %. It has gained 1,213.32 points or 6.55 % in three weeks.

The NSE 50-share Nifty also firmed up by 170.20 points or 3.00 % to 5,850.60. It has also risen by 378.85 points or 6.92 % in three weeks.

Auto stocks were the winners. Domestic passenger car sales increased 15.37 % to 1,33,486 units in August, snapping a nine-month streak of declines.

Mid-cap and small-cap indices firmed up by 3.82 % and 3.10 %, respectively, and outperformed the Sensex on good buying enquiries from retail investors.

Investors and operators preferred to book profit ahead of the Fed policy meeting next week which is also another important event.

Meanwhile, the Prime Minister's key adviser scaled down the GDP growth estimate and said a tight monetary policy should continue until the rupee stabilises.

The Prime Minister's Economic Advisory Council cut the nation's GDP growth forecast to 5.3 % for FY'14 from an earlier estimate of 6.4 %.

Concerns over growth and the monetary policy outweighed positive economic data that showed industrial output expanded 2.6 % in July after two months of contraction and retail inflation easing to 9.52 % in August.

25 scrips of the 30-share Sensex pack ended in green while remaining five finished in red.

Major gainers were Larsen (10.62 pc), M&M (7.62 pc), Sun Pharma (6.62 pc), Hero Motocorp (6.40 pc), HDFC (6.03 pc), Coal India (5.37 pc), NTPC (5.03 pc), Tata Motors (4.89 pc), Bajaj Auto (4.62 pc), ITC (4.85 pc), Sesa Goa (4.79 pc), Hindalco Ind (3.98 pc), Bharti Airtel (3.90 pc), Gail India (3.78 pc), Jindal Steel (3.30 pc), Maruti Suzuki (2.35 pc), Tata Steel (2.09 pc), HDFC Bank (2.09 pc) and SBI (1.82 pc).

However, Wipro dropped by 2.79 pc followed by ONGC 2.21 pc, ICICI Bank 1.92 pc and TCS 1.88 pc.

Among major indices, S&P BSE-Realty rose by 8.85 pc followed by S&P BSE-CG 8.01 pc, S&P BSE-IPO 5.77 pc, S&P BSE -Power 5.44 pc, S&P BSE-Auto 5.06 pc, S&P BSE-Metal 3.82 pc, S&P BSE-FMCG 3.45 pc, S&P BSE-PSU 3.12 pc, S&P BSE-HC 2.48 pc and S&P BSE-Bankex 2.26 pc.

The dollex-200 and dollex-30 also rose by 5.70 pc and 5.20 pc, respectively.

Total turnover at BSE and NSE fell further to Rs 9,343.92 crores and Rs 52,934.76 crore, respectively, from the last weekend's level of Rs 10,000.33 crore and Rs 59,932.62 crore.

Both the stock exchanges, BSE and NSE, were closed on September 9 on account of "Ganesh Chaturthi".

Oils and oilseeds: Both edible and non-edible oils traded lower in a truncated oils and oilseeds market during the week under review.

Groundnut oil dropped on stockists selling amid lower demand and ample supply positions, but fag-end recovery due to renewed demand from retailers aided to cap some losses.

Refined palmolein also dipped on heavy selling in the absence of retail buying support and lower Malaysian cues.

Castor seeds bold and castor oil commercial witnessed mostly lacklustre activity and eased following reduced demand from shippers and soap industries.

Linseed oil moved down on the back of subdued offtake by paint and allied industries.

Castor seeds futures September contract slumped on hectic selling owing to lack of export enquiries, while December contract also traded lower.

The market was closed on Monday, September 9, for 'Ganesh Chathurti'. In the edible oils segment, groundnut oil resumed steady at Rs 850 and declined to Rs 830 before regaining to finish at Rs 845 from previous weekend's level of Rs 850 per 10 kg, showing modest loss of Rs 5.

Refined palmolein resumed lower at Rs 585 and drifted to Rs 571 before settling at Rs 572 from preceding weekend's level of Rs 592, showing a sharp loss of Rs 20 per 10 kg.

In the non-edible section, castorseeds bold opened slightly down at Rs 3,645 and moved down to Rs 3,600 before closing at Rs 3,640 from last weekend's level of Rs 3,650, showing a modest loss of Rs 10 per 100 kg.

Castor oil commercial also resumed softer at Rs 759 and fell to Rs 750 before ending at Rs 758 from its preceding weekend's level of Rs 760, showing a marginal loss of Rs 2 per 10 kg.

Linseed oil opened stable at Rs 760 and later drifted to close at Rs 755 from its preceding weekend's level of Rs 760, showing a mild loss of Rs 5 per 10 kg.

Moving to the futures section, castorseeds for September delivery resumed lower at Rs 3,752 and dropped to close at Rs 3,624 from last Friday's closing level of Rs 3,763, showing a net fall of Rs 139 per tonne. While, castor seeds for December delivery opened at Rs 3,891 and surged to Rs 3,925 before declining to conclude at Rs 3,875, showing a modest loss of Rs 16 per tonne.

Forex: The rupee continued its upward march for the second week in a row on slew of positive factors, closing up by 176 paise in a shortened week above 64-mark at 63.48 against the Greenback.

Receding fears of a US military strike on Syria, resulting in fall in global crude oil prices, consistent rise in capital inflows and fresh RBI steps to boost foreign fund inflows reduced the dollar's appeal as a safer investment, leading to aid the rupee rise.

Fall in gold imports and rise in country's export for the second straight month that narrowed the trade deficit also boosted the rupee sentiment.

The Reserve Bank of India (RBI) Tuesday allowed swap facility for term deposits of lenders and relaxed norms for banks to borrow funds from overseas.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced strong at 64.40 a dollar from last weekend's close of 65.24 and immediately touched a low of 64.54.

Later, it recovered and improved to breach 63-mark to an intra-trade three-week high of 62.92 before settling the week at 63.48, showing a smart rise of 176 paise or 2.70 pct.

The Indian benchmark Sensex continued its rally for the third straight week and closed up by 462.70 points or 2.40 pct on the back of strong FIIs inflows.

Foreign Institutional Investors (FIIs) injected $ 657.31 mln on the first three days of trading sessions as per Sebi data.

"The markets should see a somewhat range-bound stable rupee until the Federal Open Market Committee meets next week to discuss whether it should scale down its bond buying programme," said Raghu Kumar, co-founder of RKSV, adding, "As we have evidenced over the past month, there is a strong correlation between the equity markets and the rupee."

The Prime Minister's key adviser on Friday said the Reserve Bank of India's tight monetary policy should continue until the rupee stabilises. The Prime Minister's Economic Advisory Council also slashed the growth forecast for the current fiscal to 5.3 % from 6.4 % projected earlier.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "The rupee strengthened taking cues from good domestic data released this week. Also, the local equities traded positively with the help of FIIs buying which further helped Rupee to trade strong. The trading range for the spot $/INR pair is expected to be within 62.80 to 64.80."

"Recommended to be cautious and buy $/INR futures on dips with the appropriate stop loss as rupee is expected to depreciate against Dollar. Pivot point for the pair is at 64.04 and below is the Support & Resistance levels," he added.

The benchmark six-month forward dollar premium payable in January rose to 258-263 paise from 248-253 paise last weekend and far-forward contracts maturing in July also strengthened to 461-466 paise from 440-1/2-447-1/2 paise.

The RBI fixed the reference rate for the US dollar at 63.7890 and for the euro at 84.6675 from 65.9600 and 86.5828 last weekend, respectively.

The rupee flared up further against the pound sterling to 100.32 from preceding weekend's close of 101.66 and also hardened against the euro to 84.34 from 85.55.

It too spurted against the Japanese yen to 63.66 per 100 yen from 65.44 last weekend.

Bullion: Gold remained under intense selling pressure for the second straight week due to consistent profit taking from speculators and stockists, following a strong recovery in rupee, amid ongoing global uncertainty.

Weighed down by a stronger rupee and cautiousness in view of Federal Reserve's scaling back its bond-buying programme kept investors on tenter-hook as selling gathered momentum with yellow-metal plunging below the psychological Rs 30,000 per 10 grams mark briefly.

The metal regained some lost ground toward the tail-end trade on back of low level buying.

Silver also witnessed hectic speculative unwinding and plummeted by a massive eight % amid lack of industrial demand.

On the global front, precious metals gold and silver suffered a major setback and lost its safe-haven demand on heavy profit-taking by investors and liquidation by hedge funds ahead of much awaited Fed's policy meet next week in the midst of strong US macro economic data.

In New York, gold for December delivery crashed to $ 1,308.60 an ounce from last weekend's level of $ 1,386.50.

Silver for December contract fell to $ 21.72 an ounce from $ 23.89 previously.

First Published: Sep 14, 2013 20:17 IST