Indian shares gave up some gains today and registered their first weekly loss in six, as investors maintained caution ahead of US Federal Reserve Chair Jerome Powell's speech that is likely to provide cues on future interest rate hikes.
The NSE Nifty 50 index ended 0.21% higher at 17,558, while the S&P BSE Sensex closed slightly higher at 58,833.87, after rising as much as 0.9% each earlier in the session. They declined over 1% for the week, after five consecutive weeks of gains.
"With markets having been largely in risk-on mode since the third week of June, the chances are low that Powell will deliver a dovish surprise with the risk rather of the opposite outcome," said Christopher Wood, global head of equities at Jefferies.
Morgan Stanley economists in a recent note had their views that “India is the best-placed economy within the region."
“First, there has been a key change in India’s structural story as policymakers have made a clear shift in their policy focus towards lifting the productive capacity of the economy. Policymakers have taken up a series of reforms which will likely catalyse an upswing in the private capex cycle,helping to unleash a powerful productivity dynamic, leading to the onset of a virtuous cycle," they said.
“The economy is lifting off after a prolonged period of adjustment. The corporate sector has delevered and the balance sheets in the financial sector have also been cleaned up. This backdrop of healthy balance sheets and rising corporate confidence bodes well for the outlook for business investment. Against this backdrop, we are seeing the unleashing of pent-up demand,especially in areas like consumer durables and property," they added.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, Indian markets remain a 'buy on dips' market for the near term. “Bank Nifty appears to be the strongest segment," he added.
