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The Sensex and Nifty jumped 1 per cent in the last trading session of 2016, recovering from recent losses and ending a volatile year with gains despite fears of outflows from emerging markets and cash crunch in the domestic economy post-demonetisation.
The broader NSE index gained 3 per cent in calendar 2016, while the benchmark BSE index advanced 2 per cent, recovering from losses in 2015.
On Friday, the NSE index rose 82.2 points or 1.01 per cent to 8,185.80, while the BSE index gained 260.31 points or 0.99 per cent to 26,626.46.
Both indexes advanced more than 2 per cent over the week, but posted modest losses for December.
Among BSE sectoral indices, FMCG index gained the most by 1.67 per cent, followed by power 1.3 per cent, healthcare 1.11 per cent and realty 1.1 per cent.
Top five Sensex gainers were GAIL (+3.07%), Sun Pharma (+2.59%), ITC (+2.31%), Power Grid (+2.14%) and Infosys (+1.67%), while the major losers were Bajaj Auto (-0.81%), Dr Reddy's (-0.46%), Tata Steel (-0.34%), HDFC Bank (-0.12%) and ONGC (-0.05%).
Volatile year
2016 was marked by volatility from global events, including Britain's vote in June to exit the European Union and the US election victory of Donald Trump in November. This year's gains would mark a recovery from a decline recorded in 2015.
At home, the approval for the Goods and Services Tax Bill earlier this year helped boost sentiment, but that was offset later by the government's move to scrap higher-denomination notes, raising concerns about economic growth.
But analysts sounded optimism for the new year, with the Reserve Bank of India expected to cut rates at its next policy review in early February and the government gearing up to issue the annual budget.
“Markets remain in comfortable zone, most of the lull was over in the last month,” said Deven Choksey, managing director of KR Choksey Securities.
“Market is expecting positive outlook from budget in subsequent months.”
Global markets
Oil prices made fresh gains on Friday and were heading for their biggest annual percentage rise since 2009, with world stocks also up nearly 6 per cent over the year despite concerns over China’s slowing growth and weakening currency.
Global markets have fared surprisingly well in a year marked by major political shocks, including June’s Brexit vote and the unexpected election of Donald Trump as US president in November. US stocks have hit successive record highs and emerging equities have rebounded 8 per cent after three years in the red.
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