Sensex snaps nine-day losing streak

Indian shares posted their biggest weekly loss in more than three-and-a-half months, but bounced back 1.7 percent on Friday, after nine sessions of decline, as oil prices extended previous session's steep decline. Financials were the top gainers. Oil prices fell 5 percent, after a 10 percent crash on Thursday, as fears about global economic recovery pushed investors to further unwind commodities positions.
The 30-share BSE index gained 1.69 percent, or 308.23 points to 18,518.81, on the day, but shed 3.23 percent for the week. Twenty-four of its components closed in the green. "Oil is the single-largest import item for India. So, oil prices cooling off is a big big positive for India," said Ambareesh Baliga, chief operating officer at Way2Wealth Securities.
"Also, we saw the longest losing streak in a decade. After that kind of fall, all the current known negatives were priced in. Yesterday's fall was overdone." Baliga expects trade to be rangebound next week with Nifty hovering in the range of 5,400 to 5,700 points.
The 50-share NSE index , or Nifty, gained 1.7 percent to 5,551.45 points. Gainers beat losers in a ratio of 1.8:1 in the broader market, with 538 million shares changing hands on the NSE, lower than its 90-day daily average volume of 642 million shares. Foreign funds have been net sellers in seven of the eight sessions to May 4, dumping nearly $1 billion of stocks in the period, and these flows will be closely watched for further directional cues next week. SKS Microfinance fell by the maximum daily limit of 20 percent to an all-time low, after J.P. Morgan cut the share price target of the microfinance institution by more than half and investors got jittery about expected weak results. The banking sector index jumped 3.9 percent after falling 6.6 percent over four days.
A larger-than-expected 50 basis points rate increase by the central bank on Tuesday had triggered a selloff on worries it would hurt consumer spending and dent earnings of companies. Leading lenders State Bank of India, ICICI Bank, and HDFC Bank climbed between 1.8 percent and 5.2 percent. Metal producers such as Sterlite Industries, Hindalco fell 1.2 percent and 0.1 percent respectively, as base metal prices in London fell to a five-month low as worries about economic growth led to the second day of a broad commodities sell-off.
Bharti Airtel shed 1.9 percent, extending Thursday's 3.2 percent drop after the top telecoms firm posted a bigger-than-expected fall in quarterly profit. Other rate sensitive sectors recovered as well. Top-listed real estate firm DLF firmed 1.9 percent. Leading automakers Tata Motors, Maruti Suzuki India, Mahindra & Mahindra and Bajaj Auto climbed between 1.6 percent and 5.5 percent.