Weekly Market Analysis 06-08-2021

Indian indices, Sensex and Nifty, closed positively for the week ended August 6. Both the indices closed in the green on four out of the five days and it crossed all-time highs. Sensex breached 53000-mark on Tuesday and also breached 54000-mark on Wednesday hitting record highs on consecutive days. Nifty closed above the key level of 16000-mark on Tuesday.

For the week, the Sensex was up 3.2% to close at 54,277.72 and Nifty closed 3% higher at 16,238.20. FIIs and DIIs were net buyers for the week. Trading data showed FIIs bought securities worth about Rs 2616 crore and DIIs bought about Rs 896.8 crore during the week.

On a weekly basis, BSE Telecom (5%), Nifty Financial Services (4.1%), Nifty Bank (3.5%) and BSE Tech (3%) indices were top gainers. In Nifty50, Eicher Motors (8.6%) was the top gainer, followed by, Airtel (8.2%), HDFC (7.7%), Kotak Mahindra Bank (7.4%) and Adani Ports (5.4%). Other financial services company that had a significant rally during the week were Piramal Enterprises (15%) and  Chilamandalam Investments & Finance (11.2%). Piramal reported a 7.7% increase in its consolidated net profit at Rs 533.8 crore in Apr-Jun quarter of FY22.

Corporate and Industry Events

There were a few events that affected the market positively and negatively during the week. While strong corporate earnings and signs of a quicker economic recovery boosted foreign investors to pump in money into Indian markets, a couple of negative news reports surfaced.

Firstly, Kumara Managalam Birla stepped down as non-executive director and non-executive chairman of Vodafone Idea. The company’s shares tanked more than 35% in two days, hearing the news. Then, India’s finance minister Nirmala Sitharaman introduced The Taxation Laws (Amendment) Bill, 2021, in the Lok Sabha on Thursday to scrap the  retrospective laws passed in 2012, which demanded taxes on indirect transfer of Indian assets prior to May 28, 2012. Vodafone Idea and Cairn Energy were affected by the law. However, after the announcement, investors welcomed the developments and Vodafone Idea surged 19% on Friday.

Separately, Reliance Industries and Future Retail shares plunged after India’s Supreme Court ruled in favour of e-commerce giant Amazon and stopped the merger and acquisition  deal between Reliance Industries and Future Retail.

In addition, auto sales data in July were encouraging and most auto scrips gained by the good numbers pushing the auto index in NSE and BSE higher. The Nifty Auto gained 2% and BSE Auto advanced 2.2% on a weekly basis.


On the economic front, IHS Markit’s manufacturing data and services data were released. Indian manufacturing activity index rose to 55.3 in July, from 48.1 in June. If the index number is above 50, it indicates an expansion in the economy and less than 50 indicates a contraction in the economy. However, services activity contracted in July, though, at a slower pace. It showed a reading of 45.4 in July, compared with a reading of 49 in the previous month.

Finally, on Friday, Reserve Bank of India announced its monetary policy decision. The central bank maintained its status quo and the monetary policy committee (MPC) decided to keep the repo rate unchanged at 4% and hinted at continuing with their dovish stance. The MPC revised the country’s CPI inflation estimates to 5.7% for FY22, from its earlier projection of 5.1%.

Global Markets

In the US markets, all the three indices close higher on a weekly basis. For the week ended on August 6, the Dow rose 0.78%, the S&P 500 was up 0.94%, and the technology-focused Nasdaq index added 1.11%. Meanwhile, the Dow and the S&P 500 indices closed at all-time highs on Friday boosted by strong job reports data. Nonfarm payrolls increased by 943,000 jobs last month, according to the US Labor Department.

In Asian markets, Chinese and Japanese equity indices closed higher. Japan’s Nikkei index rose 1.97% and the broader index Topix gained 1.49%, as investors’ confidence improved on strong corporate results amid a rise in coronavirus cases.

China’s CSI 300 index closed 2.3% higher for the week. The country’s services activity accelerated in July, but manufacturing activity slowed down. There were also reports that China has imposed strict lockdown restrictions due to increase in cases of the delta variant of coronavirus. This led to a decline in oil prices as investors were worried over oil demand recovery. US crude futures were down 1.2% to $68.28  per barrel and Brent futures were down 0.8% to $70.70 per barrel.