NEW DELHI: Indian equities got a shot in the arm on Friday, reversing their three-day losing streak, as strength in global markets, a strong rupee and depressed crude prices made the pitch conducive to go higher.
A surge in Kotak Bank shares on reports that Berkshire Hathaway was planning to pick up stake in the lender too lent a hand. The lender, however, in a BSE filing clarified that it was unaware of any such plans.
Healthy buying in banking, financial and auto stocks added to the rebound.
Investors went the distance after US Fed Chairman Jerome Powell signalled that the three-year tightening cycle is coming to an end. IMF chief Christine Lagarde’s remarks the US is not likely to see an economic contraction in the near term put more life in stocks.
In a session that was otherwise marked by high volatility, the Sensex and the Nifty logged significant gains in the last hour of trade.
The BSE Sensex ended higher by 361 points, or 1.02 per cent, at 35,673 while the NSE Nifty settled the day shy of the 10,700 at 10,694, up 93 points, or 0.87 per cent.
Kotak Mahindra Bank was the top Sensex gainer, up 8.53 per cent, after reports emerged that Warren Buffett led Berkshire Hathaway was looking to buy a 10 per cent stake in the company.
Adani Ports, Bajaj Auto, Infosys, Asian Paints and Hero MotoCorp were in pools of green on the Sensex.
Sun Pharma was the worst index performer, down 2.03 per cent. Coal India, YES Bank, NTPC, Tata Steel and Power Grid joined Sun on the losers’ list.
Midcap and smallcap stocks underperformed the benchmark Sensex. BSE Midcap ended up 0.27 per cent while BSE Smallcap closed with a loss of 0.23 per cent.
Among BSE sectoral indices, utilities declined the most with 1.05 per cent, followed by oil & gas, telecom, metals and pharma.
On the BSE, the advance-decline ratio stood at 2:3, indicating that for every two stocks that gained, three fell. This suggests underlying bearishness in market.
Let’s check out the movers and shakers of Friday.
Strong gains in rupee
The domestic unit rebounded after posting significant losses in Thursday’s session and gained nearly 45 paise against the US dollar, given a sharp decline in global crude oil prices. Weakness in the US currency supported the upmove in the rupee. The rupee was trading 70.65 against the greenback at the time of writing this story.
Crude oil prices ease
Oil prices fell on Friday as Opec discussed a potential exemption from cutting output for Iran and the producer club sought to get heavyweight supplier Russia on board, Reuters reported.
International Brent crude oil futures fell below $60 per barrel, trading at $59.53 per barrel at 0750 GMT, down 53 cents, or 0.9 per cent from their last close. US West Texas Intermediate (WTI) crude futures were at $51.05 per barrel, down 44 cents, or 0.9 per cent.
Financials grab eyeballs
Strong buying marked private banking, finance and auto stocks. Nifty Private Bank gained 1.97 per cent while Nifty Auto rose 1.14 per cent and auto 0.89 per cent.
Global stocks recover
World stocks attempted a rebound on Friday, with Asian and European markets gaining modestly after the previous day’s selloff. The pan-European STOXX 600 index was up 1.2 per cent by 0857 GMT, after falling as much as 3.2 per cent during Thursday’s rout. MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.2 per cent. That followed a 1.8 per cent drubbing on Thursday. Japan’s Nikkei added 0.8 per cent, Reuters reported.
Vinod Nair, Head of Research, Geojit Financial Services
“Indian equity market had turned cautious during the week, profit booking was evident in anticipation of the final outcome of the state elections, a precursor of the general election. Domestic market rebounded today along with global market, which has lightened up, hoping for a resolution of US-China trade war. OPEC’s decision to delay the final resolution to cut oil output caused prices to fall, boosting sentiment in India.”
Source: Economic Times