Sensex, Nifty gain for third straight day on positive economic data from US, China

The Sensex was up by 177.72 points or 0.5% to close at 36,021.42.

Equities ended the week higher by nearly 3% after the stock markets rose on Friday. The markets were tracking gains made by the Asian markets on account of positive economic data from the US and China. Closer home, improvement in the Services Purchasing Managers’ Index (PMI) supported the sentiment.

The Sensex was up by 177.72 points or 0.5% to close at 36,021.42. The broader Nifty was up by 55.65 points or 0.53% to close at 10,607.35.

The benchmark Nifty, which traded firmly in the green throughout the day, saw its gains getting capped after the European markets opened with losses. After the current week’s rally, the Nifty is just 15.9% short of its all-time high.

Ambareesh Baliga, an independent market expert, said, “The markets could extend their gains till 10,800 or 11,000 at the most, and that too before mid-July. That is because the Q1 results will start coming out and that will make a difference. The difference between the ground reality and the markets is huge. The only reason for the surge in the market is sentiment and liquidity, there has been an increase in retail participation since the start of the lockdown and the SIP flows have remained constant.”

Foreign portfolio investors (FPIs) have so far remained sellers in July pulling out $266.85 million worth of stocks in the last two trading sessions. According to the provisional data on the exchanges, FPIs sold stocks worth $74.34 million on Thursday. Domestic institutional investors bought stocks worth $121.34 million.

In the futures and options segment, the NSE witnessed a turnover worth Rs 7.92 lakh crore, against the six month average of Rs 14.49 lakh crore.

The Services PMI which was released during trading hours showed a sharp rise in June at 33.7, against 12.6 in May. However, it still remained below the neutral mark of 50 for the fourth successive month, indicating another decline in service sector output.

The markets on Friday were led by a surge in IT and auto stocks. Sanjeev Zarbade, vice president – private client group, Kotak Securities, said: “It was a good week for global equities as concerns over reports of resurgence in Covid-19 infections in the US were offset by improving macroeconomic data points as reflected by the strong non-farm payrolls data in the US. Even economic data from China has shown continued strength.”

The biggest gainers on Nifty were Eicher Motors, Adani Ports and SEZ, Bharti Airtel, Hero Motocorp and NTPC, up by 4.18%, 4.12%, 4.08%, 2.64%, and 1.98%, respectively. The biggest losers were JSW Steel, Tata Steel, IndusInd Bank, Zee Entertainment and HDFC Bank, down by 1.77%, 1.76%, 1.48%, 1.35%, and 1.28%.