The decision of the US Federal Reserve to hold interest rates saved the day for domestic benchmarks this week, as investors rejoiced the possibility of no further rate hikes for the time being.
The benchmark indices snapped the two-week decline and closed higher by around 1%. Sensex rose 0.91% this week, while Nifty 50 gained 0.96% in the week ended November 3.
“We are of the view that, the current market texture is indicating as long as the index is trading above 19,000, the pullback rally is likely to continue,” said Amol Athawale, Vice President of Technical Research at Kotak Securities.
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He added that on the higher side, 19,350-19,450 and 64,700-65,000 would act as immediate resistance areas for the bulls. Whereas on the flip side, below 19,000 and 63,500 uptrend would be vulnerable.
On a weekly basis, realty, telecommunication and oil and gas sectors drove the rally. BSE Realty gained 10.44% this week, followed by BSE Telecommunications, up at 5.38%. Meanwhile, BSE Oil and Gas rose 3.64%.
On Friday, the indices continued their rally for the second consecutive day after Fed’s decision to hold rates. Sensex closed up 283 points or 0.44% at 64,363.78, after rising as much as 454 points intraday. Nifty 50 gained as much as 143 points intraday before closing at 19,230.60, up 97.35 points or 0.51%. The midcap and smallcap gauges outperformed the benchmarks. BSE MidCap rose 0.71% while BSE SmallCap rose 0.94%.
The optimism is buoyed by firm global clues, steady macro-economic data and strong domestic corporate earnings, said Vinod Nair, Head of Research at Geojit Financial Services. The expectations that Fed is unlikely to raise interest rates in the future and the modest decline in oil prices are adding to the optimism, he said.
Realty sector continued to drive the daily benchmark movement. BSE Realty rose 2.64% on Friday. Meanwhile, BSE Services and BSE Consumer Durables advanced 1.6% and 1.44%, respectively.
Investor wealth into Indian markets increased by Rs 4.76 trillion this week to Rs 315.22 trillion, while on Friday it gained by Rs 1.97 trillion.
Foreign portfolio investors continued to sell this week and offloaded shares worth Rs 5,122 crore, while domestic institutional buyers remained net buyers and purchased shares worth Rs 5,074 crore. On Friday, FPIs sold Rs 12.43 crore, while DIIs bought Rs 402.69 crore worth shares.
