Mumbai: Value buying along with broadly positive global cues and a stable rupee aided the Indian equity market to make healthy gains of over 2 per cent on Friday.
The massive gains came a day after a widespread slide in global markets and fears of continued foreign fund outflows pulled both the key Indian indices lower by 2 per cent.
In addition to equities, domestic currency rebounded. It strengthened by over 50 paise on stable crude oil prices and reports of the central government raising tariffs on certain telecom equipments which will reduce current account deficit.
However, caution over the upcoming key macro economic inflation and industrial production data capped some of the gains.
“The market smartly reversed from yesterday’s fall amid strengthening rupee and drop in oil prices. Recent drop in valuation kept the stocks attractive while investors may seek more clarity from upcoming quarterly results,” Vinod Nair, Head of Research, Geojit Financial Services, told IANS.
“Investors are also keen on today’s CPI inflation data in the context of volatility in rupee and oil prices. Worries about US FED rate hike, US-China trade dispute and political uncertainties in India on account of upcoming state elections may impact the sentiment in the short term.”
HDFC Securities Head of Retail Research Deepak Jasani said: “After witnessing a brutal sell off on Thursday, markets rallied on Friday after a positive opening. The gains came on the back of positive global cues. Major Asian markets have closed on a positive note. European indices like FTSE 100, DAX and CAC 40 are trading in the green.”
“Technically, with the Nifty rallying sharply, traders will need to watch if the Nifty can now cross the immediate crucial resistances of 10,492 for further upsides early next week. Crucial downsides to watch in the near term are at 10,407-10,335.”
Except for IT and TECK (technology, media and entertainment), all sectors were in the green, led by finance, banking and auto counters. The auto sector gained over 4 per cent in the day’s trade.
On Friday, the Indian rupee closed at 73.56, recovering over half a rupee from its previous close of 74.12 per US dollar.
The NSE Nifty50 closed at 10,472.50, up 237.85 points or 2.32 per cent.
The benchmark S&P BSE Sensex, which had opened at 34,291.92 points, settled at 34,733.58 points, up 732.43 points or 2.15 per cent.
The Sensex touched an intra-day high of 34,808.42 and a low of 34,279.78.
“Most Asian stocks rose, holding steady after a nine-day losing streak,” said Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund.
“However, investors continued to tread on the side of caution after Wall Street shares crumbled and expectations of market volatility shot up to an eight-month high.”
In terms of fund flows, provisional data with the exchanges showed that foreign institutional investors sold stocks worth Rs 1,322.13 crore whereas domestic institutional investors bought Rs 1,287.29 crore worth of stocks.
The top gainers at Sensex were Maruti Suzuki, up 5.89 per cent at Rs 7,283.05; Mahindra and Mahindra up 5.29 per cent at Rs 768.80; and Kotak Mahindra Bank, up 4.87 per cent at Rs 1,169.40; Coal India, up 4.56 per cent at Rs 278.75 and Bajaj Auto, up 4.14 per cent from 2,628.60 from their previous close.
In an otherwise bullish intra-day trading, the Sensex had only two losers, with TCS losing over 3.10 per cent to Rs 1,918.40 and Tata Motors (DVR) slipping by 0.54 per cent to Rs 101.15 per share.