Markets see biggest jump in 7 weeks
The stock markets posted their biggest weekly gain in seven weeks, buoyed by hope of acceleration in economic reforms after the ruling Bharatiya Janata Party's strong showing in state elections.
Weakening of the dollar against global currencies, amid a dovish stance by the US Federal Reserve, also gave a boost, with foreign investors pouring a little more than $1 billion during the week. The benchmark Sensex and Nifty indices closed the truncated trading week with 2.5 per cent gains, the highest since the week ended January 27, ahead of the Union Budget. Shares of consumer goods rallied after the Goods and Services Tax (GST) Council cleared five draft Bills, paving the way for a new indirect tax regime.
“Investors couldn’t have asked for a better week, what with indices registering a record high on the back of a double bonanza of desired assembly election outcome and a dovish Fed policy,” said Amar Ambani, head of research, IIFL. The US central bank on Thursday announced the widely-anticipated interest rate increase but also signalled that future rises would be gradual.
On Friday, foreign portfolio investors netbought shares worth1,532 crore, showed provisional data provided by stock exchanges. FPIs put in close to8,000 crore (around $1.2 billion) during the week, amid a 1.7 per cent decline in the rupee against the dollar.
“The markets fired all cylinders at the beginning of the week, taking indices to new highs, pulling along with it every sector in its fold. The electoral mandate vindicated past policies and, therefore, such reforms will now accelerate. The markets have sensed this, which is why new highs are being made. FPIs have re-started their buying spree with full force,” said Jimeet Modi, chief executive, SAMCO Securities.