Weekly wrap: ECB fuels Sensex, Nifty to record levels

18:00

Moneycontrol Bureau  Market continued to tread on its road to riches with Sensex and Nifty logging seven days of unbroken winning streak on Friday. From last week, Nifty rallied 332 points to close at 8,836 and Sensex added 1167 points to close at 29,279 levels, Nifty closed at record levels yet again on Friday.

The 3.8-4.1 percent run-up in benchmark indices beat broader markets' performance majorly. For the week, CNX small-cap and mid-cap indices rose 0.5-1.3 percent higher. 

Gains in bank, infrastructure, capital goods, metal, automotive and pharmaceutical stocks were the top gaining sectors this week. Among top Nifty gainers: Cairn India, DLF, Bharti Airtel, Tata Motors, Axis Bank, Sun Pharma, Wipro and HDFC moved rose between 7-12 percent. 

Bank Nifty has rallied massively in past sessions and continues to trade at record levels on hopes of an economic revival led by potential rate cuts ahead.

Bank Nifty index which tracks stocks of all major banks has surged more than 79 percent in one year and almost 8 percent in the last month. During the week Axis Bank, HDFC Bank, ICICI Bank and Yes Bank touched their 52 week high levels.

After RBI's 25 bps repo rate cut boost last week, the European Central Bank's announcement of a Eu 1.1 trillion stimulus to stave off deflation and to boost inflation to 2 percent levels, fuelled benchmark indices back home to record highs.

BoAML in a report on Friday said that the ECB move should support equity portfolio inflows to India in FY16 which, in turn, likely to somewhat offset US Fed rate tightening. Equity strategist Jyotivardhan Jaipuria expects Sensex to hit 33,000 by December 2015

Foreign inflows have returned with a bang after dipping in early January on hope of economic revival on back of potential rate cuts. FIIs inflows invested nearly USD 1.6bn in the last six trading sessions, reported CNBC-TV18's Nimesh Shah. He said many global funds are increasing weight on India.

CLSA's Chris Woods is particularly exuberant on Indian stock market. "Indeed it (India) remains Greed & fear's favourite equity story globally so long as the hyper energetic and hyper focused Narendra Modi remains at the helm. Still the Indian equity market got another boost last week with the Indian currency's appreciation following the first rate cut by the Reserve Bank of India since May 2013," said Woods in his report –Greed & Fear.

Brian Jacobsen, Chief portfolio strategist at Wells Fargo Funds Management while in a conversation with CNBC-TV18 said India is a tremendous place for global investors to be in 2014 and the same trend is likely to be seen in 2015.

What's Next?

It's a truncated week ahead as Indian market will be shut for Republic Day celebrations on Monday.

Globally, investors will closely watch Greece elections on Sunday. The snap election set to happen on January 25 will be crucial amidst fears of Greece exiting from EU.

Among crucial earnings next week, Maruti, Idea Cellular and Ranbaxy will take the centerstage to announce their numbers for the quarter ended December 31.

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