By Porisma P. Gogoi and Rohit Vaid

Mumbai– Despite India on the verge of a major economic reform, healthy inflows of foreign funds and supportive global cues, the Indian equity markets closed flat during the last week.

The positive cues were negated by a mid-week correction. Further, the key indices were dragged down by profit booking, lower crude oil prices, uncertainty on macro-economic data and the risks to two global events.

Bombay Stock Exchange-WikipediaThe 30-scrip sensitive index (Sensex) of the BSE gained only 26.49 points or 0.09 per cent during the week to end at 28,078.35 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 44.65 points or 0.52 per cent to 8,683.15 points.

“Indian equity markets traded with volatile sentiments last week mainly due to profit booking at higher levels from traders,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Speculative trading on the success of the GST (Goods and Services Tax) bill in Rajya sabha also brought volatility in the equity markets.”

The benchmark indices started off the week on a flat note, but soon rose on the back of positive macro economic data — the Purchasing Managers’ Index (PMI) and Eight Core Industries (ECI) output figures — which unleashed fresh buying.

The Rajya Sabha passing the GST bill — the first step in reforming India’s tax laws — boosted investors’ sentiments, which was supported by the Bank of England’s decision to reduce key lending rates by 25 basis points to 0.25 per cent.

“A firm close last week not only signals that markets have in principle acknowledged that there is an emerging consensus, but the recent correction has also allowed to ease the ‘rich’ valuation feeling,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

Nevertheless, the mid-week correction sparked a spate of value buying and short covering which helped the key indices to pare their losses.

Further, government’s plan for a long-term inflation target of four per cent for the next five years, prediction of healthy monsoon rains during August and appreciation in the rupee’s value supported the upward movement.

The rupee appreciated on a weekly basis. It strengthened by 24 paise to 66.78 against a US dollar from its previous close of 67.02 on July 29.

In addition, the influx of foreign funds aided the markets to recover from lower levels.

Provisional figures from the stock exchanges showed that the week witnessed a hefty influx of foreign funds worth Rs 2,835.78 crore.

Figures from the National Securities Depository (NSDL) showed that foreign portfolio investors were net buyers of equities worth Rs 683.16 crore, or $102.03 million, from August 1-5.

Among the individual Sensex stocks, Tata Steel was the top gainer (up 7.37 per cent at Rs 380.90), followed by Hero MotoCorp (up 7.11 per cent at Rs 3,434.30), Bajaj Auto (up 5.84 per cent at Rs 2,859.85), Maruti Suzuki (up 4.06 per cent at Rs 4,948.35) and Axis Bank (up 3.55 per cent at Rs 565.45).

The losers were led by ICICI Bank (down 6.37 per cent at Rs 246.10), Lupin (down 3.80 per cent at Rs 1,674.55), Larsen and Toubro (L&T) (down 2.91 per cent at Rs 1,512.65), HDFC (down 2.47 per cent at Rs 1,340.45) and Infosys (down 0.61 per cent at Rs 1,067.40).