Bloomberg, Reuters Mumbai
India stocks marked a fourth straight week of gains, the longest streak since July, as investors assess the pace of economic recovery.
The S&P BSE Sensex slipped 0.3% to 44,149.72 points in Mumbai, while the NSE Nifty 50 Index fell 0.1%. Both indexes are trading close to record highs set on Tuesday.
Surging inflows from foreign investors have helped drive Indian equities higher even with the economy probably in its first technical recession since at least 1996. While signs of a recovery are emerging, a report will show gross domestic product contracted 8.2% in the quarter through September, according to economists’ estimates.
“Our view is that portfolio inflows and local equities will hold up as investors’ appetite for risk increases amid a global economic recovery,” Shilan Shah, an economist at Capital Economics (Asia) Pte Ltd wrote in a note.
Net foreign equity purchases of $14.5bn so far this year through November 25 are already the most since 2014, according to data compiled by Bloomberg. The addition of 12 Indian stocks to MSCI Inc’s global standard indexes in its quarterly review, effective from November 30, may also help boost inflows.
The yield on the benchmark 10-year government bond rose by four basis points to 5.91%, while the rupee weakened 0.2% to 74.0400 per US dollar. Fourteen of 19 sector sub-indexes compiled by BSE Ltd advanced, led by a gauge of real estate companies. Eighteen Sensex shares fell while 12 rose.
Reliance Industries Ltd was the biggest drag and slipped 1.2% while HDFC Bank Ltd provided the biggest boost to the index and added 1%.
Meanwhile the rupee snapped its five-day winning streak to finish 17 paise lower at 74.05 against the US dollar on Friday on emergence of demand for the greenback from banks and importers. Besides, subdued domestic equities too weakened sentiment, traders said and added that market participants also turned a little cautious ahead of the release of the September quarter GDP numbers. The GDP data was released post market hours.
The Indian economy contracted by 7.5% in the July-September quarter of this fiscal amid the Covid-19 crisis, official data showed.
At the interbank forex market, the domestic unit opened at 73.80 against the greenback and witnessed an intra-day high of 73.76 and a low of 74.07.
The local unit finally closed at 74.05 against the American currency, registering a loss of 17 paise over its previous close. On a weekly basis, the rupee gained 11 paise.
“Indian rupee halted its five-day rally and closed with a minor loss of 17 paise to 74.05 a dollar.
The dollar buying by the central banks and hedging demand at psychologically important level of 74 was seen ahead of the holiday,” HDFC Securities deputy head of retail research Devarsh Vakil said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.04% to 91.95.
“Rupee traded muted by afternoon trade on Friday tracking the dollar index muted trades. Thanksgiving holiday days keep dollar prices in a range moves,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities, said.
Indian currency markets will remain closed on Monday on account of Gurunank Jayanti.
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