Markets close positive for 3rd successive week

The markets have continued on their strong and positive path for the 3rd week running, with the Sensex rallying by a hefty 7.69% on a YTD basis. This has put the Indian markets amongst the top 5 performing global indices this year.

In fact, it’s not just the Large-Caps that have done well, but the broader markets indices like the Mid-Caps and Small-Caps have also played their part in creating wealth for investors.

On the global front, European markets flagged of the week on a negative note, as S&P downgraded France and other countries in the zone. However, mid-week the global markets picked up momentum on the back of some positive corporate earnings reported in the US. Further strengthening of the economic data there too helped improve sentiments. Finally, the ability of Greece to initiate a positive dialogue with its private lenders to resolve the debt issue provided some impetus.

Among the highlights of this week has also been the strengthening of the Indian rupee against the USD, gaining good ground of nearly 2%. This has majorly been on the back of some positive inflows from the FIIs and risk averse investors who have begun to show faith in India and returned to buy into debt funds, bonds and equities here. The rupee is expected to gain further, since the demand for the dollar may subside after the duty on precious metals’ imports was nearly doubled yesterday. At present the rupee is up by 6% this year and 6.6% from its lifetime low of Rs 54.30 per dollar touched on Dec 15, 2011. As a result of the positive inflows this week, FII net investments in equity now stand at Rs 3178 cr for week ended Jan 20, 2012.

Moving back to the domestic turf, the interest rate-sensitive Realty index was amongst top gainers for another consecutive week, up by 8%. Oil & Gas sector also did well with 6.5% gains, as the appreciating rupee helped OMCs to roll back on their under-recoveries to some extent. Bankex did well on back of expectations that the RBI will initiate a reversal in interest rate cycle. A fall in bond yields also helped to buoy them.