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Weekly Wrap: ‘Value Buying’ In Beaten Down Stocks Drive Sensex, Nifty Higher 

The S&P BSE Sensex rose 1.09% this week to end at 37,384.99, while the NSE Nifty 50 rose 1.2% to nearly 11,100.

A trader smiles while working at a stock brokerage in Mumbai. (Photographer: Adeel Halim/Bloomberg News)
A trader smiles while working at a stock brokerage in Mumbai. (Photographer: Adeel Halim/Bloomberg News)

Indian equity benchmarks ended higher this week, driven by buying in select beaten-down stocks.

The S&P BSE Sensex rose 1.09 percent to end at 37,384.99, while the NSE Nifty 50 rose 1.2 percent to 11,075.

“The Nifty recovered on the back of value buying among beaten-down stocks,” ICICI Securities Ltd. said in a note. “The expectations of U.S.-China trade deal also helped sentiment as midcap and small cap indices gained during the week.”

With the Nifty maintaining above 11,000, we expect 10,950 to act as an important support for the index in coming sessions. The Nifty may attempt to move towards 11,200, which is the highest call base.
ICICI Securities

UBS, however, was cautious about the future market trend. “Our Nifty target for June 2020 is 11,100 with upside and downside scenarios of 13,200 and 9,200, respectively, implying the risk-reward isn’t attractive for the market,” Gautam Chhaochharia, India analyst at the brokerage, told BloombergQuint in an emailed statement.

“We still expect a narrow market ahead and remain underweight on small-mid caps, industrials and autos,” Chhaochharia said.

Eight out of the 11 sectoral gauges compiled by National Stock Exchange ended higher this week, led by the NSE Nifty PSU Bank Index’s 5.5 percent gain. On the flipside, the NSE Nifty IT Index was the top sectoral loser, down 1.94 percent.

How The Broader Markets Performed

The broader markets represented by NSE Nifty 500 Index ended 1.5 percent higher, led by gains in India Tourism Development Corporation Ltd., Jindal Stainless (Hisar) Ltd. and Wockhardt Ltd.

The Rupee’s Weekly Performance

The Indian rupee was the top performing currency among Asian peers this week. The local unit appreciated 1.1 percent against the U.S. dollar to end at 70.92.

Big Talking Points This Week

Key Events To Watch Next Week

  • Sept. 16: India WPI Inflation for August.
  • Sept. 18: U.S. Federal Open Market Committee rate decision