Global cues spur stocks
Higher consumer inflation and falling industry output could not hold back the benchmark Sensex, which vaulted 428 points to close above 41000 on Friday. Prospects of a trade deal between the US and China and hopes of a swift Brexit after a thumping election win by Britain’s Conservative Party seemed to have spurred the risk appetite on the bourses.
The gain in stock prices came a day after government data showed retail inflation rising to an over three-year high of 5.54 per cent in November even as industrial output contracted 3.8 per cent in October, compounding problems for the domestic economy going through a slowdown.
However, investor attention was focused on the global markets where stocks soared on reports that the US has finalised an initial trade deal with China in return for Beijing buying more American goods. US President Donald Trump had given his final approval to the deal which would suspend tariffs that are set to kick in from Sunday, thus de-escalating their trade war.
There was more good news when Boris Johnson secured a huge majority in the UK’s general elections, ending the uncertainty over Brexit.
These developments led to a rally in metal stocks.
Companies with exposure to the UK such as Tata Motors also gained.
While the Sensex opened 173 points higher, it built on the gains and breached the 41000-mark to hit an intra-day high of 41055.80. It subsequently ended 428 points, or 1.05 per cent, higher at 41009.71. On the NSE, the broader Nifty settled 114.90 points, or 0.96 per cent, higher at 12086.70.
On a weekly basis, the Sensex advanced 564.56 points, or 1.39 per cent. The Nifty rose 165.20 points, or 1.38 per cent.
Barring six stocks in the Sensex, the rest gained in the range of 0.11-4.21 per cent. Axis Bank was the top gainer followed by Vedanta at 3.75 per cent, SBI by 3.39 per cent, Maruti 3.20 per cent and IndusInd Bank by 3.07 per cent.
“The markets continued its winning streak fuelled by trade deal optimism and positive cues from the UK election. Global growth sentiment helped domestic indices to subside weak CPI and industrial data in the near term,” said Vinod Nair, head of research at Geojit Financial Services.