A smart rally on the Budget day pushed the market to end the week higher with Nifty reclaiming its crucial 8,700 mark, however, the cautious sentiment ahead of the Reserve Bank of India’s policy meeting and visa woes on the IT sector kept the momentum slow in the last two trading sessions.
During the week ended February 03, the S&P BSE Sensex added 1.3% or 358 points to settle at 28240, while Nifty50 gained 1.2% or 100 points to close the week at 8741.
Midcap and Smallcap stocks outperformed. The BSE Midcap index rose 2.5%, while the BSE Smallcap index surged 2.4%.
“With the ongoing pause, market is offering a fresh opportunity to those who have missed the recent surge. Now, the key is find those counters which still look promising and offer ample upside from the current levels. We feel banking, auto and NBFCs fits that bill alongside select stocks from media and infra space,” said Jayant Manglik, President, Retail Distribution, Religare Securities.
Sectors and stocks
The week saw BSE Realty index gaining 5%, followed by the BSE FMCG index (3.4%), the BSE Bankex index (2.5%), the BSE Healthcare index (1.8%), the BSE Capital goods (1.8%), the BSE PSU (1.6%) and the BSE Consumer Durables (1.1%).
The BSE IT index, on the other hand, shed 1.9% after legislation was introduced in the US House of Representatives, which among other things, calls for more than doubling the minimum salary of H-1B visa holders to $130,000.
The move, experts say, will make it difficult for the software services firms to replace American employees with foreign workers, including from India.
Meanwhile, among Sensex stocks, Bharti Airtel, ITC, Cipla and Dr Reddy’s advanced 9.3%, 5.8% and 4.8% and 4.5%, respectively for the week. SBI added 4%, Axis Bank 3.6%, while ICICI Bank jumped 3.4%.
Losers included TCS (5.3%), Tata Motors (4%) and NTPC (2.8%) and Wipro (2%).
‘No bad news is good news’ is what sums up best Budget 2017 for stock market. The Finance Minister Arun Jaitley refraining from tweaking long-term capital gains (LTCG) soothed investors’ nerves, while sector specific budgetary stimulus such as according infrastructure status to affordable housing, relief on LTCG on immovable property, plans to create a mega oil firm along with setting up a comfortable fiscal deficit target of 3.2% for FY18 boosted market spirit.
An eventful week back home overshadowed the significant global developments that played quietly in the stock market. The US Federal Reserve kept interest rates unchanged, while Bank of Japan also maintained status quo in their respective policy meetings. Bank of England also said they are in no rush for rate hikes. They repeated that they could tolerate some overshoot of their inflation target, but only within limits. Meanwhile, People’s Bank of China unexpectedly raised the interest rates on open market operations, adding to growing concerns about US President Donald Trump’s aggressive policies.
MARKET NEXT WEEK: The investors will took cues from the strong US jobs growth data which pushed the Wall Street higher on Friday. Index of Industrial Production (IIP) data due on Tuesday and Reserve Bank of India’s policy meeting scheduled for Wednesday will also be under investors’ radar.