Shares post 7th weekly jump in longest rally in 20 months

Markets darted up to fresh peaks on Friday, capping off a stellar week where the benchmarks closed at record highs every session because of unabated foreign fund inflows.

The markets on Friday posted minor gains, with the Nifty advancing 19.85 points (0.14%) to close at 13,760.55 and the Sensex rising 70.35 points (0.15%) to close at 46,960.69.

During the week, the Sensex rallied 861.68 points, or 1.86%, while the Nifty surged 246.70 points, or 1.82%. The indices posted a seventh straight weekly gain, their longest winning streak since April last year.

The Nifty Midcap 100 index gained 1.9% this week, thanks to the overall buoyancy in global markets because of the development of the Covid-19 vaccine and strong capital flows.

According to data from NSDL, foreign portfolio investors (FPIs) till December 17 pumped $5 billion into equity markets. This means that December has so far seen the third-highest FPI inflows after November and August.

Rusmik Oza, executive vice president, head of fundamental research, Kotak Securities, said: “The market remained buoyant on earlier-than-expected deployment of Covid-19 vaccines, impending US fiscal stimulus and decreasing domestic Covid cases. Two largest NBFCs, Bajaj Finance and HDFC, were the biggest gainers this week.”

IT stocks witnessed heavy buying on Friday, with the Nifty IT index outperforming gains of the benchmark index as well as the sectoral indices. The Nifty IT index rallied by 1.59% and the top gainers on the index were Infosys, Mphasis, and Wipro, up by 2.31%, 2.1% and 1.7%, respectively.

In its report, Edelweiss Securities said a robust tech upcycle or Techolution has just begun. The brokerage said, “Tech budgets are getting a boost due to exceptions to age-old zero-based budgeting; financial services, after sagging for more than a decade, is coming back with a promise of strong spend; pricing in digital is moving northward; furloughs will be equal to or lower than earlier years; and margins will expand again.”

While pressure from profit taking did hurt the markets, the benchmark indices recovered smartly taking cues from the European markets. The bourses in France, Germany and the UK were up between 0.1% and 0.2%. The markets in Taiwan, China and Hong Kong were down between 0.06% and 0.67%.

Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “Global cues were positive on optimism over a US stimulus package and the Federal Reserve’s promise to keep pouring cash into markets.”

The futures and options segment saw a turnover worth Rs 15.96 lakh crore and the cash market segment saw a turnover worth Rs 68,908.81 crore. This is against the six-month average of Rs 21.7 lakh crore in the F&O segment and Rs 59,316 crore in the cash market segment.