Sustained buying by foreign institutional investors (FII) helped the domestic equity bourses post its eighth consecutive weekly gains. The last time it witnessed such a trend was in June 2009. The BSE Sensex ended the week with a gain of 0.27% at 17,693 while the NSE Nifty recorded a weekly gain of 0.16% to close at 5,290. During the last four trading sessions, FIIs purchased Indian equities worth Rs 2,182 crore, while their total investment during March stood at Rs 19,928 crore. The inflows during the month is the highest since October 2007.
During the week, the benchmark equity indices also scaled its two-year high on March 29, 2010. While Sensex touched its two-year high of 17,793, the Nifty hit a high of 5,330 in the intra-day trade. However, the week also saw action shifting towards the mid and small-cap stocks, with mid-cap indices outperforming the large-cap ones. BSE small-cap index rose 3.28% while the mid-cap index registered a weekly gain of 1.52%.
An encouraging fourth quarter advance tax figures of top Indian companies (an indication of higher earnings) gave further impetus to the post-Budget rally. Standard and Poors, the global credit rating agency, has already revised the outlook on India to stable from negative on the back of improved government finances. Other global rating agencies like Moodys and Fitch already have a stable outlook on India.
Global investor sentiments are also turning positive on the back of positive news. The index of US manufacturing activities in March rose to its highest level since July 2004, according to data released on Thursday. Earlier, a US labour department report showed initial weekly claims for jobless benefits falling more than expected. Equity markets across the world have taken the cue. While Dow Jones index was up 0.65% on Thursday, Nikkei 225 stock surged 0.37% to touch its 18-month high on Friday. Stocks in China and Hong Kong reached their highest closing levels in more than two months.