US economic data soothes investor nerves – Market News

Indian equities finally bounced back on Friday after six sessions of mayhem as positive news from across the globe calmed investor sentiment.

Third quarter GDP data for the US came in at two-year high of 4.9%, which surpassed expectations of 4.2%, thus reviving confidence in the US economy.

Asia-Pacific indices, too, closed in the green. Taking a cue, the benchmark Sensex swung into the green, jumping 653 points, or 1%, to 63,782.8, while the broader Nifty jumped 190 points, or 1%, to close above the 19,000-mark at 19,047.25. On a weekly basis, however, both indices shed 2.5%.

Investor wealth rose by Rs 4.4 trillion to Rs 310.45 trillion, after a near Rs 18-trillion erosion over the past six sessions.

A total of 2,801 stocks advanced on the BSE, while 866 declined.

“Even on the domestic front, heavyweights like Maruti, Cipla and Dr Reddy came out with robust results, which boosted sentiment. Now, all eyes will be on PCE (Personal Consumption Expenditure) data, which would be important for Central Bank’s policy meeting next week. While US Fed’s rate decision on Wednesday will be a key event, investors will also await the BoJ’s meeting outcome on Monday amid high global bond yield. We expect the markets to continue with its volatile move going forward ahead of key economic events and the earnings season,” said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.

The BSE Mid-Cap rose 1.7% and BSE SmallCap 1.9% on Friday. YTD, they have returned 23% and 27.5%, respectively.

Both the Nifty and Sensex were among the biggest losers globally, owing to the 2.5% fall. Analysts say the sell-off was more intense in smaller companies. The Nifty Midcap Index fell close to 3% while the BSE Smallcap fell 2% compared to last week. Elevated global interest rates and crude oil prices remain concerns, they added.
All sectoral indices declined on a weekly basis, with the Realty, Metals, and Media declining the most (up to 5%) while others fell close to 2%.

The Bank Nifty gained 1.2% on Friday, with the PSU bank index surging over 4%.

“Results have been fairly good for PSU names, and a heavy correction was seen. Investors are buying into PSU banks again, as there is no clear sign of concern. Fundamentals also remain fairly strong,” said Pankaj Pandey, head of retail research at ICICI Direct.

FPIs have offloaded $2.1 billion (close to Rs 17,500 crore) in October so far, while DIIs have pumped in a net Rs 26,272 crore. On Friday, FPIs withdrew a net Rs 1,500 crore, while DIIs bought to the tune of Rs 313.7 crore, shows provisional data by the exchanges.