India's BSE Sensex and NSE Nifty 50 rose for a third straight week in the holiday-shortened week ended Friday, Nov. 13, as foreign portfolio investors took their net purchases of Indian shares to INR 84,290 crore (about US$9 billion) in the first half of November, according to depository data cited by the Press Trust of India. The Sensex gained 0.7% over the week to close at 81,592.45 and the Nifty added 0.46% to 25,144.30, according to Business Standard.

The gains were small next to the previous week's rally of more than 1,900 points in the Nifty, as measured by The Economic Times, and the week ended on a loss. For funds across Asia that have moved money out of crowded technology trades and into Indian banks, the question for the coming week is whether a central bank that may have to raise interest rates slows the flow.

Sensex and Nifty: a nine-month high, then a Friday drop

Trading was shortened by the Diwali Balipratipada holiday on Tuesday. The Sensex rose 107.25 points on Monday and 772.75 points, or 0.95%, on Wednesday to 81,879.40, a level it had not reached since Feb. 26, PTI reported. The Nifty closed that day at 25,255.05, its highest in nearly nine months. Thursday added 31.61 points to the Sensex, a third straight advance.

Friday broke the run. The Sensex fell 318.56 points, or 0.39%, and the Nifty lost 155.05 points, or 0.61%, in what PTI described as the first major decline of the month for both indexes. The trigger was October retail inflation of 6.09%, up from 5.54% in September and above the Reserve Bank of India's upper tolerance limit for the first time in two years. Food inflation rose to 8.94% from 7.74%. Economists now expect a policy rate increase in December, PTI said.

Mahindra & Mahindra, UltraTech Cement, Bharat Electronics, NTPC, Trent and HDFC Bank were among Friday's biggest decliners in the Sensex, while Hindustan Unilever, Asian Paints, Bharti Airtel and Reliance Industries rose. Smaller companies also slipped: the Nifty Midcap 150 fell 0.35% and the Nifty Smallcap 250 lost 0.3%, Business Standard reported.

Earlier in the week the leadership was different. Mahindra & Mahindra climbed 5.25% on Wednesday and InterGlobe Aviation, the parent of IndiGo, rose 4.37%. On Thursday, Bajaj Finance, State Bank of India and ICICI Bank led, while Hindustan Unilever, Maruti Suzuki and Tata Consultancy Services lagged. Vinod Nair, head of research at Geojit Investments, said that day that buying in financials and property stocks had offset profit-taking in information technology, consumer goods and autos.

Foreign portfolio investors return, earnings split the movers

Depository data cited by PTI showed foreign portfolio investors bought a net INR 84,290 crore of equities over nine trading sessions from Nov. 2 to Nov. 13. That followed net withdrawals of INR 34,843 crore in October and INR 35,861 crore in September, and cut the year's cumulative outflow to about INR 2.1 lakh crore from nearly INR 3 lakh crore a few weeks ago. (One lakh crore is 1 trillion rupees.)

The latest daily report from National Securities Depository Ltd., dated Nov. 13 and covering the previous trading day, showed net equity purchases of INR 8,898.80 crore, or US$949.05 million. Stock exchange figures reported by PTI put foreign buying at INR 7,212.22 crore on Monday, INR 12,563.33 crore on Wednesday and INR 7,830.60 crore on Thursday. Capital Times reported the early stage of the November buying on Nov. 11.

Vedant Gupte, chief executive of investment platform Trackk, called the buying "a sharp tactical turn, not yet a structural return." He said most of it had gone into index heavyweights and that domestic institutions were using the rally to book profits. V.K. Vijayakumar, chief investment strategist at Geojit Investments, said financials, telecom, capital goods, pharmaceuticals and automobiles drew the heaviest foreign buying, helped by short-covering in large bank stocks.

September-quarter results produced sharp single-stock moves on Friday, according to Business Standard. Multi Commodity Exchange of India rose as much as 4% to a record INR 3,768.30 after its quarterly net profit more than doubled to INR 455 crore and revenue grew 113.9% to INR 800 crore. Automotive Axles jumped as much as 17% after its profit rose 67% to INR 60 crore, and fellow parts makers Sharda Motor Industries and Fiem Industries gained as much as 14% and 10%.

Ola Electric Mobility went the other way. The electric two-wheeler maker's shares fell more than 6% in early trade to a low of INR 33.48 after revenue dropped nearly 39% from a year earlier to INR 421 crore. Its net loss narrowed to INR 362 crore from INR 418 crore.

What is scheduled for Indian stocks this week

PTI listed U.S. Federal Reserve minutes, crude oil prices, the rupee and expectations of an RBI rate increase as the main inputs for the week starting Nov. 16, along with the last of the second-quarter earnings reports. Brent crude futures for December stood at $96.40 a barrel on Friday evening, down from $98.30 a week earlier, Business Standard said.

Positioning is stretched. Ashish Katwa, technical analyst at BP Wealth, told Business Standard that nearly 90% of Nifty 50 stocks were trading above their 20-day moving average, a reading that has often preceded a pause. He put key support for the index at 24,450. A weekly technical column in The Economic Times placed resistance at 25,425 and 25,550 and support at 24,850 and 24,600.

The corporate calendar is busy as well. The Economic Times counted 31 companies with record dates for dividends and stock splits between Nov. 16 and Nov. 20. Cochin Shipyard's record date for an interim dividend of INR 6 a share falls on Monday, Power Finance Corp.'s for INR 4.1 a share on Tuesday, Page Industries' for INR 150 a share on Wednesday and Oil India's for INR 7 a share on Friday.

The daily exchange figures on foreign flows resume on Monday evening, the first reading on whether buyers stayed after the inflation report.