The domestic stock market scripted a strong recovery on Friday—the fifth consecutive day of fall—which has been one of the most rare instances. A spectacular performance of blue-chip stocks and strategic value buying lifted the Nifty with nearly 2% gain to a fresh record, while the Sensex surged 1,293 points.
Markets Summary
The 30-share BSE Sensex closed at 81,332.72, up by 1,292.92 points or 1.62%. In trade, it surged 1.73% to an intraday high of 81,427.18. NSE Nifty also touched an all-time high of 24,834.85 and closed 428.75 points or 1.76%. Investors heaved a sigh of relief that there had been an unexpected turn-around after a week of relentless losses.
Key Winners and Losers
Most Sensex stocks ended the day in green, with Bharti Airtel leading the pack; it rose over 4.51%. Adani Ports, Sun Pharma, Tata Steel, HCL Technologies, Infosys, JSW Steel, and Mahindra & Mahindra were the other notable gainers. Nestle was the only loser among Sensex stocks, ending 0.07% lower.
International Market Trends
The recovery in Indian markets has been guided by mixed trends in global markets. Tokyo’s market closed in the red as other Asian markets, like Seoul, Shanghai, and Hong Kong, remained in the green. Back home, US markets had mostly ended lower Thursday, while European markets were trading in the positive zone. Global oil benchmark Brent crude, too, slipped 0.40% to USD 82.04 per barrel.
FII Operations and Current Patterns
Thursday witnessed the sale of stocks worth ₹2,605.49 crore by FIIs, which turned them net sellers. The BSE benchmark, despite an intraday steep decline, partially recovered and slipped 0.14%—109.08 points—to 80,039.80. Similarly, the NSE Nifty fell to 24,406.10, or 7.40 points, or 0.03%.
The BSE Sensex lost 1,303.66 points, or 1.60 per cent, in the last five trading sessions, while the Nifty dropped by 394.75 points, or 1.59 per cent. A strong performance by frontline companies and some value buying at lower levels, supported Friday’s recovery, which was a much-needed respite.
Analysis and Outlook
The strong rebound of the Sensex and Nifty has proved that the Indian stock market is very resilient, considering the uncertainty across the globe. The rebound came with the back of strategic value buying, thus proving that investors have sufficient confidence in the long-term prospects of key industries. It is expected that investors who were apprehensive about the recent fall would turn optimistic due to this very positive trend.
However, one also needs to keep a balanced perspective. Though the market is on an uptrend, there are some worrying global economic factors too, and external factors could play their role in destabilizing the market. Hence, investors need to keep a watch on trends in the global market, as the direction of the market in the future will depend upon the trend in institutional investor behavior.
Sectors like steel, technology, and pharmaceuticals, all of which rose sharply on Friday, will have to keep performing if this pace is to be sustained. Also, in a few weeks, economic data and policy action will give a better sense of direction to the market.
Summary
The recovery of Sensex and Nifty augurs a welcome turn in the Indian stock market after a tough week. The rebound has been mainly driven by value investing, with blue-chip stocks doing well. Market durability has been proven. Focus is still on the actions of institutional and strategic investors with the world’s markets still posting mixed patterns. The future course of economic policies and performance of important industries will be critical in deciding the direction the market will take.
Sensex zooms 1,293 points; Nifty at fresh record high after five days of losses By Nitin Kumar
