Closing market podcast for May 7, 2018

Equity markets witnessed a strong day as the S&P BSE Sensex reclaimed Mount 35K while the same can’t be said for the Indian currency which slipped below Rs 67/USD.

The Indian rupee weakened past 67-mark to hit a 15-month low against US dollar after foreign investors continued to liquidate its holdings in local equity and debt market, and rise in crude oil prices.

“With WTI oil also pushing above $70/bbl, rupee resumed the weakness pushing beyond Rs 67/USD. FIIs continue to be net sellers in Indian equities, adding further pressure on the rupee,” Anand James, Chief Market Strategist at Geojit Financial Services told Moneycontrol.

“To this end, CPI release scheduled later this week will be viewed with interest. Markets participants also watched the RBI's recent move to conduct OMO; to buy government bonds worth up to Rs 10,000 crore on 17May,” he said.

The Sensex traded above the psychologically important 35,000 level while the Nifty traded above 10700 levels towards the close of the trade thanks to positive global cues. The markets finally closed the day with gains of over 0.50 percent led by gains in metals, oil & gas, realty, auto, and consumer discretionary goods.

“Globally, investors digested the trade talks between the US and China. Both sides recognize that there are still big differences on some issues and they need to continue to step up their work to make progress,” Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund.

“Investors remained skittish over the outcome of these talks. On the sectoral front, while the IT and healthcare indices traded with losses, strong gains of over 1% were seen in most of the other sectoral indices,” he said.

Sectorally, the S&P BSE Metal index gained 1.6 percent, followed by the S&P BSE Oil & Gas index which gained 1.64 percent, and the S&P BSE Realty index rose 1.51 percent.

On the losing front, the S&P BSE Healthcare index slipped 0.5 percent, followed by the S&P BSE IT index which closed flat with a negative bias.

Sensex gainers include names like GAIL India (up 4.2 percent), M&M (up 3.6 percent), Axis Bank (up 3.04 percent), Hindalco (up 2.8 percent), and Tata Steel (up 2.7 percent).

Index heavyweight, ICICI Bank closed 2.4 percent ahead of results. The private sector bank is expected to report over 50 percent fall in profit weighed down by doubling in provisions for bad loans which could pull the net profit by 52.7 percent on a year-on-year basis to Rs 955.7 crore, according to a Reuters poll.