Global markets end in green despite trade war, Syria tensions; US markets rise as Dow up 1.7%
Positive momentum in the market continued for the seventh consecutive session on Friday, helping benchmark indices post a healthy performance for the third week in a row.
The 30-share BSE Sensex was up 91.52 points at 34,192.65. The Nifty failed to hold 10,500 levels. It ended 21.90 points higher at 10,480.60, rallying five percent in three consecutive weeks.
During the week, the Sensex gained 1.7 percent and the Nifty rose 1.4 percent, while IT was the biggest gainer among sectoral indices, rising more than 5.5 percent.
“IVs remained choppy for the week. This is likely to trigger some positive sentiments, going forward. We feel a close above 25,300 for the Bank Nifty is likely to take the index towards its sizeable Call base of 25,500,” said Amit Gupta of ICICIdirect.
“During the week, FIIs continued to withdraw from the cash segment and took out USD 250 million from Indian equities (in April their tally is over USD 500 million till now),” he added.
The current price ratio of Bank Nifty/Nifty continues to remain near 2.40 levels. Last week, the index added huge open interest on Thursday. Bears tried to dominate during three of the week’s sessions, but levels of 25,000 continued to act as a decent support.
“For the week, Nifty climbed 1.44 percent and closed below 10,500 levels. The benchmark Nifty gained over 3 percent in the last seven trading sessions with third weekly gain and on the valuation front Nifty is trading at price-to-earnings multiple of 26x,” said Anita Gandhi, Whole Time Director at Arihant Capital Markets.
India’s industrial production continued to record healthy growth for the fourth straight month, coming in at 7.1 percent in February. Consumer price index (CPI) inflation eased marginally to a five-month low of 4.28 percent in March, compared with 4.44 percent in February.
The Implied Volatility (IV) of calls was down and closed at 13.1 percent, while that for put options closed at 13.12 percent. The Nifty VIX ended the week at 14.56 percent and is expected to remain sideways.
Global markets were mixed this week amid geopolitical tensions over Syria and trade war concerns. Geopolitical tensions weighed on market sentiment during the week after President Donald Trump and UK Prime Minister Theresa May said that the use of chemical weapons by Syria did not go unchallenged.
The Nikkei ended 0.6 percent higher at 21,778.74. During the week, the index gained 1 percent, thereby finishing in the green for the third straight week.
In March, China saw a trade deficit of USD 4.98 billion for the first time since February 2017, as exports fell 2.7 percent compared with the same period last year, and imports increased 14.4 percent. China’s factory inflation slowed for the fifth straight month, while the consumer price index retreated from a four-year high.
US markets posted healthy gains in the week gone by, with the S&P 500 index rising 1.99 percent, the Dow Jones gaining 1.79 percent, and the Nasdaq rising 2.77 percent.
Initial jobless claims in the United States fell to 233,000, a decrease of 9,000 from the previous week’s unrevised level of 242,000. Economists had expected jobless claims to drop to 230,000.
Meanwhile, the less volatile four-week moving average rose to 230,000, an increase of 1,750 from the previous week’s unrevised average of 228,250, SMC said in a report.
The US consumer price index dipped 0.1 percent in March, after rising by 0.2 percent in February. Economists had expected consumer prices to come in
European shares remained afloat in a week mired by geopolitical tensions, ending the week near one-month highs, while results disappointments drove some sharp moves. The STOXX 600 was on track for its third straight week of gains, its longest winning streak since January, Reuters reported.
The pan-European benchmark reported a weekly gain of 1.2 percent. Eurozone industrial production decreased for the third straight month in February, while industrial output fell 0.8 percent month-on-month, following a 0.6 percent fall in January. This was the third consecutive fall and came in contrast to the expected rise of 0.1 percent.