Mumbai, June 13 (IANS). Major benchmarks of the Indian stock market registered impressive gains this week due to increasing confidence among investors regarding the possible peace agreement between America and Iran and the fall in Brent crude oil prices. After two consecutive weeks of decline, the market showed strength.
Nifty rose by 1.10 percent this week and reached the level of 23,623 on the last trading day on Friday with a strong gain of 1.99 percent. At the same time, the Sensex closed at 75,528 with a gain of 1,695 points or 2.30 percent, thus a gain of 1.73 percent was recorded in the Sensex in this entire week.
According to analysts, despite global challenges and uncertainties regarding the interest rate policy of the US Federal Reserve, the Indian stock market showed strength. Large-cap stocks performed better during this period, while profit-booking was seen in mid-cap and small-cap stocks after the recent sharp rally.
Experts say that there was some softening in bond yields in America this week, but due to persistent inflationary pressure and strong employment data, expectations of interest rate cuts seem to be postponed for the time being.
An analyst said, “The Indian stock market traded in a narrow range throughout the week and despite a mild negative trend, it saw a good recovery at the end of the week.”
Meanwhile, Indian bond yields also declined, due to increased liquidity in the market due to the policies of the Reserve Bank of India (RBI) and increasing interest of foreign investors in the debt market.
Talking about sectoral performance, the financial sector was the best performing sector. These stocks witnessed good buying momentum due to positive regulatory developments in private banks and defensive attitude of investors. Along with this, FMCG stocks also gained momentum due to their ability to maintain prices.
On the other hand, the decline in the IT sector continued. At the same time, metal stocks remained under pressure due to fears of weak demand in China and softening commodity prices.
Market experts believe that if the pace of selling by foreign institutional investors (FIIs) slows down further or clarity regarding the policies of the US Fed increases, then the domestic stock market may get further support.
During the entire week, FIIs sold shares worth about Rs 15,300 crore, which remained a major challenge for the market. However, the pace of selling slowed down somewhat in the last days of the week.
In contrast, domestic institutional investors (DIIs) continued strong buying and brought in net investments of around Rs 24,000 crore during the week.
The performance of broader market indices was also in line with the major indices. The Nifty Midcap-100 index gained 0.98 percent, while the Nifty Smallcap-100 index gained 0.48 percent.
According to market experts, the level of 23,800 will be an important resistance for Nifty. At the same time, the area of 23,550 to 23,500 can act as immediate support.
In Bank Nifty, the level of 56,900 to 57,000 is considered to be the nearest resistance, while the range of 56,500 to 56,400 remains the immediate support area.
Investors will now keep an eye on domestic Wholesale Price Index (WPI) inflation data, China’s industrial production data and the upcoming interest rate decision of the US Federal Reserve, which can decide the direction of the market in the coming days.
–IANS
DBP