Weekly Report: Market rally continues in fourth week

The market closed higher for the fourth straight week as global markets cheered better U.S. inflation data, commodity prices softened and foreign investors kept on buying Indian equities. Strong earnings and a better monsoon fuelled the rally on the home lawn. In the last week, the BSE Sensex gained 1,074.85 points (1.84%) to closed at 59,462, while the Nifty 50 advanced 300 points (1.72%) to closed at 17,698 levels.

The Large-cap Index gained nearly 2 percent and the Mid-cap Index advanced 1 percent, while the Small-cap index added 1 percent. On a sectoral basis, the Metal sector added nearly 5 percent, the Capital Goods index gained 4 percent, and the Power index advanced 3.6 percent. However, the FMCG index fell 1 percent.

“Ahead of India’s retail inflation data, benchmark indices settled higher for the fourth straight week. Technically, Nifty is consistently forming higher high and higher low formations which are broadly positive. In addition, on weekly charts, it has formed a bullish candle that also supports a further uptrend from the current levels,” said, Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities.

We believe that, due to the temporary overbought situation, we could see range-bound activity in the near future. On the higher side, the immediate resistance would be 17900-18000. On the downside, 17400-17300 could be the key supports level for the positional traders. For traders, buying on dips and sell on rallies could be a good strategy, he added.

Foreign Institutional Investors (FIIs) bought equities worth Rs. 7,850.12 crores this week, while Domestic Institutional Investors (DIIs) sold equities of Rs. 2,478.19 crores. In August so far, the FIIs bought equities worth Rs. 14,841.66 crores, while DIIs sold equities worth Rs. 4,243.78 crores. The Indian rupee ended lower against the U.S. dollar. The domestic currency fell 41 paise to end at 79.65 per dollar on August 12.

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