Mar­kets Ex­tend Gains for 5th Straight Week

MOV­ING TOO FAST? Nifty main­tained cru­cial 10k level, while Sen­sex closed up at 32,325 points as stocks snapped a 2-day los­ing streak

The Economic Times - - Markets: Beating Volatility - Our Bureau

Mum­bai: In­dian stocks snapped a two-day los­ing run on Friday with the Nifty gain­ing 0.5% af­ter a late surge aided by short-cov­er­ing in auto and bank shares. The re­bound helped stock in­dices ex­tend gains to the fifth straight week and Nifty close above the psy­cho­log­i­cally cru­cial 10,000-mark though mar­ket par­tic­i­pants ex­pect in­vestors to be on the edge amid wor­ries that the mar­ket has risen too fast, too soon in re­cent weeks.

The Sen­sex gained 87.53 points, or 0.27%, to close at 32,325.41. The Nifty rose 52.75 points, or 0.53%, to close at 10,066.40. This week, the Sen­sex gained 0.05% and the Nifty has risen 0.5%. But for the last minute ad­vance on Friday, the mar­ket would have ended on a weak note this week. The stock mar­ket had weak­ened in the pre­vi­ous two trad­ing ses­sions af­ter the Re­serve Bank of In­dia held on to its neu­tral stance in bi-monthly mone­tary pol­icy on Wed­nes­day. While expectations of a 25-ba­sis point cut in the key pol­icy rate were baked into the stock prices, in­vestors were hop­ing the cen­tral bank would tone down the out­look too. An­a­lysts said the ab­sence of trig­gers af­ter the mone­tary pol­icy prompted some traders to cut their bullish bets. “The RBI rate ac­tion and stance were on ex- pected lines. Ei­ther way, we don’t see ex­ter­nal trig­gers like th­ese af­fect­ing the liq­uid­ity flow much,” said Har­sha Upad­hyaya, chief in­vest­ment of­fi­cer-eq­uity at Ko­tak Mu­tual Fund. Mar­ket par­tic­i­pants do not ex­pect any ma­jor moves on ei­ther side un­less in­sti­tu­tional in­vestors step up their ac­tiv­ity. This week, for­eign port­fo­lio in­vestors were net sell­ers, of­fload­ing shares worth .₹ 2,368 crore, while their do­mes­tic peers bought to the tune of .₹ 3,553 crore in this pe­riod.

“In the ab­sence of any ma­jor trig­gers, the mar­ket is not likely to see big move­ments in the coming weeks in ei­ther di­rec­tion,” said Kunj Bansal, chief in­vest­ment of­fi­cer, Cen­trum Wealth Man­age­ment. Lead­ing bro­ker­ages have slashed their tar­get price on drug ma­jor Lupin by as much as 16% af­ter its June quar­ter earn­ings be­lied Street expectations. An­a­lysts ex­pect the current fi­nan­cial year to be chal­leng­ing for the com­pany in terms of US sales given the lack of block­buster prod­ucts.

Lupin on Wed­nes­day re­ported a 59.4% fall in net profit in the June quar­ter at 358.06 crore due to sharp ero­sion in price of generic Glumetza in the US, strong ru­pee and de­stock­ing ahead of Goods and Ser­vices Tax im­ple­men­ta­tion. Its shares hit a 52-week low of Rs 963 in Friday’s ses­sion, be­fore end­ing at 990.05, down 0.3% from pre­vi­ous close. The stock is down 33% for the current year.

“Earn­ings tra­jec­tory will be de­ter­mined by new prod­uct ap­provals in the US. Al­though LPC (Lupin) con­tin­ues to gain ap­provals, its lack of high-value launches is likely to ad­versely im­pact near-term earn­ings,” said No­mura. 1,310 1,020 1,170 1,395 1,491 1,000

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