Indian stocks showed growth on Friday as buying activity swept across nearly all sectors, with this rise being fueled by a sharp recovery in information technology (IT) stocks. Almost all indices on the NSE closed in positive territory, with the exception of the Nifty Oil and Gas index.
The Nifty IT index increased by 3%. Despite ongoing market concerns regarding oil prices and US relations with Iran, the green day for the Nifty 50 index was supported by the slowdown in tensions between the two warring nations and positive results from TCS. Thanks to this recovery, the eight-week streak of losses for the benchmark index finally ended.
The Nifty 50 index closed at session levels at 22,520, showing a rise of 1.3%, while the Sensex reached 72,472.33, increasing by 1.23%. Out of 23 sectoral indices on the NSE, 22 showed positive momentum. Over this week, the Nifty 50 rose by 0.44%, breaking an eight-week slump. It is worth noting that the index had only experienced a longer losing streak of nine weeks in 2001.
However, over the month, the index lost 3.89%, over three months—6.02%, over six months—5.28%, and this year—13.87%, and over the last year—10.57%. Overall on the NSE, stocks brought an increase in market value of about 4.59 trillion rupees. The previous day, on Thursday, the value of stocks listed on the NSE fell by 10 trillion rupees. Friday's rise was supported by large companies.
Mr. G Chokkalingam, founder of Equinomics Research, noted that TCS's quarterly reports provided some confidence to IT stocks, but the Nifty's recovery is more of a short-term rebound driven by bargain hunting.
The growth was less pronounced in defensive sectors. The Nifty Pharma and Nifty REITs & InvITs indices rose by 0.5% each, while the Nifty Chemicals index added 0.6%. The Nifty Oil & Gas index was the only sectoral indicator to close in the red, declining by 0.1% to 10,345.
Gift Nifty futures for October traded in the evening at 22,605, which is 1.1% higher, indicating a confident start to the next week. Vinod Nair, Head of Research at Geojit Investments, stated that investors are now awaiting domestic CPI data on Monday for further signals regarding the trajectory of interest rates after the RBI's shift to calibrated tightening. He also emphasized that future actual second-quarter earnings, which are expected to be good year-on-year (Y-o-Y), will be crucial in determining the sustainability of the market recovery.
In other emerging markets, Japan's Nikkei fell by approximately 1% in early trading, while South Korea and Taiwan were closed for holidays. China's central bank defended the yuan. The yield on 10-year US Treasury bonds fell to approximately 5.25% from 5.35% on Thursday, approaching its highest level since 2002, slightly easing pressure on emerging market assets.
The rupee strengthened by 16 points to 96.72 against the dollar, ending a three-day slide. Analysts are closely watching the oil market, where they see little optimism. G Chokkalingam added that the situation next week depends on oil prices: 'If oil prices fall, we may see some sustained recovery. The rains have not come, and bond yields, inflation, and interest rates are rising.'