MUMBAI: : Benchmark indices snapped a two-day losing streak on Friday as European leaders reached a deal on immigration while oil prices fell amid concerns over supply disruption and continued friction between the US and Iran.
The Sensex ended up 385.84 points, or 1.1%, at 3,5423.48 and the Nifty ended 125.20 points, or 1.2%, up at 10,714.30. The BSE MidCap and SmallCap indices, which had fallen steeply earlier this week, ended up 1.8% and 1.9%, respectively.
The rupee climbed from its alltime, intraday low of 69.09 to the dollar on Thursday, tracking gains in other Asian currencies as the Europe immigration deal helped investors gain confidence globally. The local unit gained nearly half a percent to close at 68.47 per dollar Friday versus the Thursday close of 68.79.
The rupee is one of the worstperforming currencies this year among emerging markets. The rupee had hit a record low the day before as a global trade war and rising oil prices threatened to widen Indias fiscal deficit or excess of overseas spending over revenues.
While the Reserve Bank was seen intervening in the currency market on Thursday, economic affairs secretary Subhash Chandra Garg said India has adequate foreign reserves and “firepower” to deal with the rupees fall.
Acting finance minister Piyush Goyal said there was no need for undue concern.
“The rupee is volatile due to external factors and there is no need for a kneejerk reaction. India's macroeconomic indicators are strong,” Goyal said on the sidelines of an event in New Delhi. “Appropriate steps would be taken after consultations with all stakeholders after taking into account global factors.”
On a weekly basis, Nifty lost almost a percentage point. US-China trade war concerns, rising crude oil prices and weakening rupee were the major components dampening sentiment on the street. Stateowned bank stocks were under severe pressure through the week after a Reserve Bank of India (RBI) report stated gross nonperforming assets (NPAs) of public sector banks may rise to 22.3% by March 2019 from 21%. The underlying sentiment is fragile due to ongoing global trade frictions and macro worries, said fund managers. “Uncertainty over political developments and macro headwinds continue to worry the markets,” said Harsha Upadhyaya, CIO, equity, Kotak Mutual Fund.
“This is likely to continue for some more time and till then the markets are likely to remain range-bound, with some more correction in certain pockets of mid and small caps.”
The market breadth indicated the overall health of the market was strong. On BSE, 1,842 shares gained while only 743 shares fell.
“Looking at the overall macro and the FII (foreign institutional investor) outflows, volatility is likely to continue. At the same time, there could be interesting opportunities on a bottom-up basis in stocks which have corrected significantly," said Navneet Munot, CIO, SBI Mutual Fund. “Overall (domestic) flows in absolute terms may have come down a bit but the heartening feature is the continuance of SIP (systematic investment plan) flows.”
FIIs sold equities worth ₹157 crore on Friday while domestic institutions bought stocks worth ₹2,263 crore. Selling by overseas investors eased in June compared with the previous two months. FIIs sold shares worth ₹4,153 crore this month till June 28, whereas they offloaded shares worth ₹10,062 crore and ₹5,552 crore in May and April, respectively.
“We continue to maintain our positive stance on the market and feel there may be short-term volatility in the market owing to global trade wars,” said Hemang Jani, head, advisory, Sharekhan by BNP Paribas.