Global equity markets were largely positive in the past week as Russia signed a myriad of deals with China, Europe was focused on elections and civil wars, actual or evolving bubbled along in the Ukraine, sub-Saharan Africa and Thailand. In a mood of post-electoral euphoria, as the voters celebrated their wildest dreams being realized, the Nifty added 164 points, to close 2.3% up at 7367, after trading in a range of 2.6%. Average daily trading volumes rose sharply again, to $5.3bn, as FIIs continued their cash equity buying with a net $117mil; domestic investors continued to be suppliers of stock, selling a net $211mil. Volatility again traded down, the India VIX falling sharply from 24 to 14 before recovering a bit to close at 18 for net fall of six points on the week. Breadth was good, with advances three to two ahead of declines but concentration was again evident in the points’ contributions. Four stocks representing just 16% of Nifty market cap generated 63% of the upward movement in the index; two stocks, 9% of market cap, held the index back by 39 points: 24% of the net movement. Index futures closed at a premium of just over 1% to cash.
We had just one quarterly result of interest: ITC surprising slightly on the upside with sales ahead by 11.8% and profits up by 18.2%. The company still faces damp consumer demand and though cigarette volumes declined, earnings benefitted from stronger margins, which delivered the surprise. Overall, 35 out of 56 CNX100 companies to have reported so far have delivered earnings above expectations; the best performing sectors being Financials, IT and Materials.