The Sensex and Nifty gained for a second straight session on Friday as the domestic sentiment improved after the government stuck to its b udgeted market borrowing for the year, easing concerns New Delhi would widen its fiscal deficit target.
The 30-share BSE index Sensex ended little changed at 31,283.72, up 1.24 points but dropped 1.4 percent for the month. The 50-share NSE index Nifty rose 19.65 points or 0.2 per cent to 9,788.60, but gave up 1.3 per cent this month.
Barring FMCG, IT and TECk, all other BSE sectoral indices ended in the positive zone. Among them, realty index gained the most by 2.42 per cent, followed by metal 1.37 per cent, consumer durables 1.24 per cent and auto 1.22 per cent. On the other hand, FMCG index was down 0.66 per cent, IT 0.28 per cent and TECk 0.01 per cent.
Top five Sensex gainers were Bajaj Auto (+2.34%), Bharti Airtel (+1.63%), Adani Ports (+1.51%), M&M (+1.49%) and Coal India (+1.35%), while the major losers were HUL (-2.37%), Wipro (-1.71%), TCS (-1.67%), Dr Reddy's (-1.62%) and ITC (-1.11%).
Domestic markets have been under pressure this month on foreign fund outflows amid worries that the government may widen its fiscal deficit target of 3.2 per cent of gross domestic product for the year ending in March 2018 to boost an economy that grew at a slower pace than expected.
Fiscal defict target
The government's decision to stick to its planned market borrowing of Rs 2.08 lakh crore ($31.79 billion) in October-March was seen as an indication New Delhi planned to stick to its fiscal commitment, though Economic Affairs Secretary Chandra Garg did leave the door open for increased bond sales.
“(The) government's decision to stick to its fiscal deficit target (is) helping sentiment,” said Deven Choksey, promoter, KR Choksey.
Rupee strengthens to 65.28
Meanwhile, the rupee strengthened to as much as 65.28 per dollar, but was still down over 2 per cent on month against the dollar, its biggest monthly decline since November 2016.
The benchmark 10-year bond yield fell 1 basis point to 6.63 per cent, helped after the Reserve Bank of India on Thursday raised the foreign investment limit
Markets saw a tough month in September as a slew of negative global and domestic factors, including expectations of further rate hikes by the US Federal Reserve and a weaker-than-expected economic growth at home, hit sentiment.
The NSE index was headed for a 1.5 per cent loss in September with foreign investors net selling equities worth $2 billion during the month. They had sold a net $1.1 billion in shares in September.
Foreign outflows have weighed on the rupee, which was down 2.3 per cent this month against the dollar, its biggest fall since November.
Asian shares
Asian shares regained some poise on Friday after a tough week in which the gathering risk of a US rate rise lifted Treasury yields toward nine-year highs and boosted borrowing costs across the region.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.2 per cent, but was still down a sizeable 2 per cent for the week so far.
US stocks
Wall Street had edged higher on Thursday, as the S&P 500 eked out a record on gains in McDonald's and healthcare names, while investors continued to hope President Donald Trump will be able to make progress on tax reform.
The Dow Jones Industrial Average rose 40.49 points or 0.18 per cent to 22,381.2, the S&P 500 gained 3.02 points or 0.12 per cent to 2,510.06 and the Nasdaq Composite added 0.19 points to 6,453.45.