Weekly Wrap: Modi Re-Election Rally Slows Down As Focus Shifts To Economy

A broker looks at an electronic board displaying the activity of the yen against the U.S. dollar at a foreign exchange brokerage in Tokyo, Japan. (Photographer: Haruyoshi Yamaguchi/Bloomberg News)

Indian equity benchmarks extended gains for the third consecutive week, their longest weekly gaining streak in nearly two months.

The benchmark indices, however, retreated from Thursday's record close after Nirmala Sitharaman was named the finance minister amid week economic growth. There was speculation in the media ahead of portfolio allocation that Amit Shah, Bharatiya Janata Party president and a former stock broker, could be given the finance ministry in Modi's second term. He was named the home minister.

The S&P BSE Sensex closed 0.71 percent higher this week to end at 39,714.20; and the NSE Nifty 50 ended at 11,922.80, up 0.66 percent.

“The first issue Sitharaman and the Finance Ministry should address is how to supercharge domestic consumption,” said Vikram Kirloskar, president of Confederation of Indian Industry. “This means clearing up retail finance, perhaps better liquidity in the NBFC space.”

Jayant Manglik of Religare Broking remains cautious in the near term. The domestic macro data and RBI's monetary policy, he said in a statement, will dictate the market trend in the next couple of weeks. Global developments, especially the U.S.-China trade talks and movement of crude oil prices, will be constantly monitored, he said.

HDFC Securities' Nagaraj Shetti said the Nifty formed a small bull candle when seen in a weekly time frame chart. “The formation of upper shadow around 12,040 levels in the last couple of weeks signals an emergence of selling pressure near the new highs,” he said. “This pattern could possibly result in a minor weakness or a range movement for the next week. Immediate support to be watched at 11,830.”

The broader market index represented by the NSE Nifty 500 Index closed 0.85 percent higher during the week, led by the gains in Symphony Ltd. and Narayana Hrudayalaya Ltd.

Six out of 11 sectoral gauges compiled by the NSE ended lower this week, led by the NSE Nifty Auto Index's 3.4 percent decline. The NSE IT Index's 3.8 percent gain made it the best weekly performer.

Rupee Resumes Weekly Fall

The Indian rupee resumed fall after a breather last week. The home currency depreciated 0.25 percent against the dollar to end at 69.69 against the greenback.

Key Talking Points Of The Week

Modi sworn in as Prime Minister amid pressing economic slowdown.
Union Cabinet portfolio allocation: Amit Shah gets Home, Sitharaman new Finance Minister.
It's official! Unemployment in India at highest since 70s
Anil Ambani in talks to sell radio unit for $173 million.
India's government-owned firms pay a hefty price for increased borrowings.
Fraud detected at Jet Airways led to lookout circular against Naresh Goyal, says official.
U.S. Visa rules to hit IT companies' profits, margins in FY20, says Crisil.
BQ Exclusive: RBI panel may not suggest large surplus transfer to government.
IndiGo promoter friction may be due to related-party transactions.