Weekly Closing: Sensex, Nifty Gain 3% On Hopes Of Successful Peace Talks Between Russia And Ukraine

The Indian equity benchmarks rebounded sharply in the week ended April 1, 2022 as investors hoped for success of peace talks between Russia and Ukraine, analysts said. The Sensex rose 3.33 per cent and Nifty 50 index climbed 3 per cent during the week. The week started off on a positive note with gains in four out of five sessions. 

For the week, Sensex rose 1,914 points to close at 59,276.69 and Nifty 50 index advanced 517 points to close at 17,670.

In the financial year ended March 31, the Nifty and the Sensex rose more than 18 per cent each, even as a spike in crude prices kept the final quarter subdued.

Broader markets also witnessed buying interest in line with their larger peers as S&P BSE MidCap index rose 2.74 per cent and S&P BSE SmallCap index rose 3.23 per cent.

Foreign institutional investors (FIIs) also remained buyers in Indian markets as they net bought shares worth Rs 1,635 crore in first four sessions of the week but they remained net sellers in Indian markets for the month of March. FIIs sold shares worth Rs 411,123 crore in March, data from National Securities Depository Limited (NSDL) showed.

"Market rally was primarily on the back of Russia-Ukraine peace talks and some buying coming back by FIIs after they heavily sold shares in the Indian markets," AK Prabhakar, head of research at IDBI Capital told Outlook Business over phone.

Meanwhile, analysts are pointing towards caution ahead of sharp bounce back as the market participants will watch out for fourth quarter and full financial year earnings by Indian companies going ahead.

The country's largest software services provider - Tata Consultancy Services - will kick start the earnings season on April 11 followed by Infosys on April 13 and HDFC Bank on April 16.

"Rally was also partly fuelled by short covering in the markets which fell sharply lower in past two weeks. Inflation pressure will be there for every industry in fourth quarter as higher raw material cost will impact margins and the result season can be disappointing," Prabhakkar added.

"Historically, April remains one of the best months for the Indian equity market where Midcap and Smallcap tend to outperform and we have seen a trailer today. Technically, the Nifty witnessed a breakout of 100-DMA on Wednesday and now it is witnessing a rally following yesterday's consolidation. On the upside, 17800 is an immediate target while 18,000-18,100 is the critical resistance zone," said Parth Nyati, founder of Tradingo.