Major Events Behind, Global Cues To Direct Domestic Markets: Analysts

Optimism in global markets on COVID-19 vaccine developments boosted sentiment, say analysts

Major Events Behind, Global Cues To Direct Domestic Markets: Analysts

Both indices registered a fifth straight weekly gain.

Domestic share markets finished the four-day trading week more than 2 per cent higher, as investors cheered signs of a rebound in the country's economy following a record slump in the April-June period. Optimism in global markets on COVID-19 vaccine developments also boosted sentiment, say analysts. The S&P BSE Sensex index added 929.83 points or 2.11 per cent for the week to settle at 45,079.55 on Friday, and the broader NSE Nifty 50 benchmark gained 289.60 points or 2.23 per cent to 13,258.55 — both record closing highs.

Both indices registered a fifth straight weekly gain. The financial markets were closed on Monday for Guru Nanak Jayanti.

The Reserve Bank of India (RBI) on Friday held the key interest rates on hold as widely expected, amid high inflation and shrinking GDP. Official data last week showed the country's GDP contracted a better-than-expected 7.5 per cent in the July-September period, following a plunge of 23.9 per cent in the first quarter of 2020-21.

Analysts say that the domestic markets will take cues from global markets for the time being.  

"With all the major events behind us, we feel global cues would dictate the market trend ahead. Besides, news related to COVID vaccines will also be in focus... Mostly rate-sensitive shares ended on a strong footing," said Ajit Mishra, vice president-research at Religare Broking.

Real estate, metal and state-run banking shares led the upmove last week. Most sectoral indices finished the week higher, except the Nifty Financial Services gauge, which slipped 0.05 per cent.

Mid-cap and small-cap segments also backed the rally. The S&P BSE MidCap and SmallCap indices climbed up 2.80 per cent and 2.62 per cent for the week respectively. The Nifty Midcap 100 and Smallcap 100 gauges moved 2.45 per cent and 1.92 per cent higher respectively.

In the Nifty basket of 50 shares, GAIL, ONGC, Hindalco, Sun Pharma, Adani Ports, Maruti Suzuki and Asian Paints registered double-digit percentage gains, finishing the week 10.32-16.76 per cent higher each. 

On the other hand, HDFC Bank (down 3.52 per cent), Kotak Mahindra Bank (down 2.78 per cent) and Bajaj Finance (down 0.64 per cent) were the worst among only six laggards in the index.

Some follow-up buying may be seen in the week starting December 7, Mr Mishra said. "Traders should not get carried away with the prevailing buoyancy and stick to quality names as we can't ignore the possibility of an intermediate corrective phase."