Stock market today: The local market closed higher for the week ended Friday, February 16, as investors shifted their focus to fundamentals and macroeconomic indicators, but optimism remains that the US Fed will begin decreasing rates in June of this year. For the past few months, the market has been mostly driven by the expectation of rate decreases. While US inflation is over the Fed's 2% objective, the economy is exhibiting symptoms of weakening, according to recent data.
According to the Wall Street Journal, US retail sales decreased 0.8% in January compared to December, much exceeding predictions of a 0.3% drop. In addition, Federal Reserve data showed that January industrial production fell by 0.1%, compared to estimates of a 0.2% increase. Fresh US macroeconomic data has fueled speculation that the Fed may drop interest rates shortly.
"Bets for a rate cut of at least 25 basis points in May edged up to 40 per cent, while the odds for June stood at roughly 79 per cent, according to the CME Group's FedWatch Tool," as reported by Reuters. On Friday, equity benchmarks the Sensex and Nifty finished with solid gains on favorable global cues.
The Nifty 50 closed at 22,040.70, up 130 points (0.59 percent), while the Sensex rose 376 points (0.52 percent) to 72,426.64. With this, the market benchmarks extended their gains for the fourth straight session. The mid and smallcap indices beat their benchmarks. The BSE Midcap index jumped 0.78 percent, while the Smallcap index increased 0.68 percent.
The BSE's market capitalization increased to roughly ₹389.5 lakh crore from ₹387.3 lakh crore in the previous day, resulting in a ₹2.2 lakh crore gain for investors in a single session.
Nifty 50 and Sensex this week
The Nifty 50 and Sensex closed more than 1% higher this week, while the BSE Midcap index closed about 1% higher. The BSE Smallcap index underperformed, closing flat this week.
This week's top gainers in the Nifty 50 index included Wipro, Mahindra and Mahindra (M&M), SBI, Bajaj Auto, and Apollo Hospitals Enterprises. On the other hand, shares of Hindalco Industries, ITC, Bharti Airtel, Hindustan Unilever, and Tata Steel fell on a weekly basis.
"The Indian market maintained its broad-based recovery, backed by good global indicators. Furthermore, investors flocked to capital goods, metals, and industrial equities as India's trade imbalance shrank due to lower commodity prices and the government's manufacturing push. On the global front, an expectation of a rise in consumption demand in China following the New Year vacations bolstered global market mood," said Vinod Nair, Head of Research at Geojit Financial Services.
As the Nifty 50 approaches its record high, Ajit Mishra, SVP of Technical Research at Religare Broking, advises investors to keep a positive but cautious stance.
"We need sustainability above 22,150 to end the consolidation and move toward the 22,500+ zone; else, profit taking may resume. Traders should monitor the banking index for indications, while others may continue to provide support on a rotational basis. Furthermore, the performance of the global indices, particularly the US, will be on their radar," said Mishra.
