The NSE Nifty finished Friday at 25,709.85, up 0.5% or 124.55 points from the day before. The BSE Sensex ended at 83,952.19, 0.6% or 484.53 points higher. Both indices gained 1.7% in the past week.
The muhurat trading session that marks Diwali will be held on October 21. The Bank Nifty hit a record on Friday and closed 0.5% higher.
In the past week, the index has gained close to 2%. The Nifty FMCG index advanced 1.4% while the healthcare index rose 0.8%. Consumer durables, pharma and auto indices moved 0.7% higher.
“The gains in the banking stocks drove the market higher this week post their business update, which reflected higher loan growth that cheered investors,” said Siddarth Bhamre, head of research, Asit C Mehta Intermediates.
AgenciesPickup in Loan Growth
“The pickup in loans could also be due on account of festive season and may not sustain post this period,” Bhamre said.“Since banks are neither expensive nor cheap at this point, both private and state-run banks can see further upside in the short term, but the cost of borrowing is also likely to increase and eat into net interest margins (NIMs), so investors should wait till next quarter to gauge whether the uptick in loan growth persists,” he said.Asian Paints emerged as the top gainer in the Nifty pack and jumped 4.1% on Friday. Mahindra & Mahindra and Bharti Airtel rose over 2% each. “Most investors place bets ahead of Diwali and cherry-pick stocks for long-term investment as the muhurat trading window is just for an hour,” said Dharmesh Kant, head of research, Cholamandalam Securities. “The gains are likely to cool off post the Diwali week.”
Due to two quarters of earnings disappointment, expectations have been low, so even unexceptionally positive news has led to a jump.
The Nifty Mid-cap 150 and Small-cap 250 indices declined 0.5% and 0.2%, respectively on Friday. Out of the 4,326 shares traded on the BSE, 1,641 advanced, while 2,527 declined.
In the past week, the mid-cap index rose 0.2% while the small-cap index shed 0.2%.
“The Nifty was trading in a triangle formation since May and witnessed a breakout on Thursday which indicates that the benchmark can be at 26,300 levels in the next month,” said Vipin Kumar of Globe Capital Market. “However, there are some concerns on the gains sustaining.”
FPI SELLOFF
The lack of participation by the broader market in the rally and the foreign institutional investor (FII) long-short ratio persisting at low levels could cap gains, he said. Foreign portfolio investors bought shares worth a net ₹309 crore on Friday. Their domestic counterparts did so to the tune of ₹1,526.6 crore. In October, global investors purchased shares worth ₹817 crore.
