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Indian equity benchmarks clocked their best weekly gains in over two years after the rupee appreciated the most since March 2017 on the back of falling crude prices amid positive corporate earnings.
The S&P BSE Sensex rose 4.98 percent to 35,011 and the NSE Nifty 50 Index climbed 5.2 percent to 10,553.
Sentiment got a boost on Friday from a global market rally which was triggered after Bloomberg News reported U.S. President Donald Trump is interested in reaching an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina this month and has asked key officials to begin drafting potential terms.
Meanwhile, most corporate earnings announced so far, at least by companies on the Nifty, have been in line or better than anticipated. 27 of 38 Nifty companies have either beaten or met analysts’ estimates, according to data compiled by BloombergQuint.
This has been a challenging year for the markets starting with implementation of long-term capital gains tax, spike in crude prices, currency depreciation and then the default by IL&FS, and in the backdrop of all these events, corporate earnings have been a clear winner, Deven Choksey, managing director of KR Choksey Investment Managers, told BloombergQuint over the phone.
Had it not been corporate earnings and had it not been for the overall growth in the economy, Choksey said, we would have seen much sharper drop in equities.
Indiabulls Housing Finance Ltd. was the top Nifty gainer this week. The stock rose for the second week in a row—by nearly 27 percent, the most on record—to Rs 871. On the flipside, Coal India Ltd. fell the most, by around 7 percent, to Rs 261.55.
PC Jeweller was the top gainer among the Nifty 500 shares, surging as much as 78.72 percent to Rs 88.20 after gold prices jumped on the back of increased festive season demand.
All sectoral gauges compiled by the National Stock Exchange ended higher. The Nifty PSU Bank Index surged 13.6 percent, its biggest weekly gain since Oct. 29, 2017, when the government had announced Rs 2.11-lakh-crore recapitalisation plan.
Analysts said the recovery of cases referred to the National Company Law Tribunal will aid public-sector banks’ balance sheets. The banking sector, they said, is likely to benefit from the resolution being worked out for Essar Steel.
The rupee was the third-best performing Asian currency this week, tracking the fall in crude prices, as Bloomberg reported on the possibility of U.S. granting waivers to India from sanctions on Iranian oil imports.
The local unit strengthened as much as 1.4 percent, or 103 paise—the most in a week since March 2017, to 72.44 against the greenback.
The bullish trend in the equity market and fresh foreign fund inflows also provided support to the rupee.
Big Talking Points This Week
- India expects shadow banking default amid cash squeeze.
- GST collections cross Rs 1-lakh crore mark in September.
- RBI-government tensions: Did the finance ministry statement do enough to calm nerves?
- RBI calls next board meet on Nov. 19 amid tensions with finance ministry.
- India jumps 23 places on World Bank’s ease of doing business index.
- NBFC crisis tops agenda in meeting between government, regulators.
. Read more on Markets by BloombergQuint.