Indian equity markets snapped a four-day losing streak on Friday, staging a robust recovery led by gains in banking, metal, and energy stocks. The benchmark indices closed sharply higher, providing much-needed relief to investors after a period of sustained selling pressure.
Benchmarks Post Strong Gains
The 30-share BSE Sensex jumped 447.05 points, or 0.62 per cent, to settle at 72,652.62. During the trading session, it even touched an intraday high of 72,832.23. Similarly, the broader NSE Nifty climbed 157.70 points, or 0.72 per cent, to close at 22,055.70.
This positive movement marked a decisive turnaround. Prior to this session, the Sensex had declined by 1,306.18 points or 1.77 per cent over the previous four consecutive trading days. The Nifty had also shed 397.5 points or 1.77 per cent in the same period.
Key Drivers and Sectoral Performance
The rally was broad-based, with several heavyweight sectors contributing to the upswing. From the Sensex basket, major gainers included:
- Power Grid Corporation
- NTPC
- Axis Bank
- Reliance Industries
- State Bank of India
- Larsen & Toubro
On the flip side, some stocks faced selling pressure. Tech Mahindra, HCL Technologies, Infosys, Tata Consultancy Services, and Wipro were among the notable laggards, reflecting a mixed sentiment in the information technology sector.
In the broader market, the BSE midcap gauge climbed 1.05 per cent, and the smallcap index advanced 0.79 per cent. All major sectoral indices ended in the green, with utilities, power, services, metal, commodities, and industrial indices leading the charge with gains of up to 2.20 per cent.
Market Sentiment and Expert Outlook
The recovery was attributed to a combination of bargain hunting at lower levels and a positive trend in global markets. Analysts suggested that domestic investors used the recent dip as a buying opportunity in fundamentally strong stocks.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the market dynamics. He noted that the recent correction was primarily driven by sustained selling from Foreign Institutional Investors (FIIs), who have been net sellers in Indian equities. However, he pointed out that this selling was being offset by consistent buying from Domestic Institutional Investors (DIIs) and retail investors, providing underlying support to the market.
This institutional activity highlights a ongoing tussle between foreign and domestic money flows. While FIIs have turned cautious, possibly due to global factors like high US bond yields, the strong domestic investor base is helping to cushion the market from steeper falls and facilitating recoveries like the one witnessed on Friday.
The overall market breadth was positive, indicating healthy participation. On the BSE, 2,332 stocks advanced while 1,499 declined and 117 remained unchanged. In Asian markets, Seoul, Tokyo, and Hong Kong settled with gains, while Shanghai ended lower. European markets were also trading positively during the afternoon. Meanwhile, in the United States, Wall Street had ended with significant gains on Thursday, which provided a positive cue for global trading sentiment.
The recovery on Friday, April 26, 2024, demonstrates the resilience of the Indian equity markets. It underscores the importance of domestic investor confidence in driving market trends, even in the face of foreign capital outflows. While volatility may persist due to global macroeconomic uncertainties, the day's strong performance offers a reminder of the underlying strength in key sectors of the Indian economy.
