By Ravi Dutta Mishra and Rohit Vaid
Mumbai, Dec 29 (IANS) Global relief rally following the resolution of a standoff between US President Donald Trump and Federal Reserve Chairman Jerome Powell gave a lift to the Indian equity markets.
Initially, investors around the world were spooked by a partial US government shutdown and slowing global growth, and to add to it were reports that the US President had discussed sacking the Federal Reserve Chairman over Fed's decision to hike the short-term interest rate.
However, reassurances by Kevin Hassett, Trump's key economic adviser, that Powell's job is safe unleashed a global rally.
As a result, the two key domestic equity indices -- Sensex and Nifty -- finally ended with nearly a per cent gains in the week punctuated by heavy volatility.
Apart from global cues, decline in crude oil prices and strengthening of Indian rupee also accounted for the BSE Sensex's 334.65 points, or 0.93 per cent, gains. Sensex closed at 36,076.72 points on Friday.
Similar was the trend in broader NSE Nifty50 which edged up by 105.9 points, or 0.98 per cent, to close the week at 10,859.90.
"Despite volatility, domestic market gained some momentum this week led by improvement in macros drop in oil prices...," Geojit Financial Services Head of Research Vinod Nair said.
"On the other hand, global markets were volatile due to a fear of growth being affected. Trade war between the US and China, partial shutdown of the US government and tightening of interest rate in the US were the major headwinds impacting the global market."
According to Viral Berawala, CIO, Essel Mutual Fund, the week gone by saw wild swings at Wall Street, beginning with one of the worst Christmas-eve ever to the largest single-day point gain seen towards the end.
"Oil prices have fallen the most this quarter since 2014," said Berawala. The Brent Crude price was over $50 per barrel at the closing bell here on Friday.
A strengthening domestic currency also firmed up the rise of market back home. The Indian rupee gained 76 paise against the US dollar that ended at 69.94 from its last week's close of 70.15.
"Weekly expiry, negative global cues turning positive, continued fall in crude and strength in INR translated in an overall buying momentum," said Mustafa Nadeem, CEO, Epic Research.
Besides, healthy buying by foreign institutional investors (FIIs) aided the gains, as global investors reacted to positive fundamentals due to improving macros.
As per the provisional BSE data, FIIs bought a total of Rs 1,249.6 crore worth of shares during the week ended on Friday. On the other hand, domestic institutional investors ended the week with marginal buying of just Rs 96.36-crore shares.
"The top sectoral gainers for the week were the media, PSU banks, energy and infra indices. The top losers were the realty, metal and auto indices," Deepak Jasani of HDFC Securities' Retail Research said.
The top gainer on both BSE and NSE was Bajaj Finance, which gained 1.55 per cent, followed by ONGC, up 1.21 per cent. Mahindra and Mahindra, Kotak Mahindra Bank and SBI gained up to 1 per cent.
In contrast, Hero MotoCorp lost 6.87 per cent, followed by Bajaj Auto with a decline of 5.58 per cent. Other major losers were Tata Motors(DVR), Asian Paints and Maruti Suzuki -- all in the range of 3 to 5 per cent.
(Ravi Dutta Mishra can be reached at ravidutta.m@ians.in and Rohit Vaid at rohit.v@ians.in)
