The Indian stock markets experienced a sharp rebound on Friday, reversing early-day losses to end the week on a positive note with modest gains. The Sensex surged by 843.16 points, or 1.04%, closing at 82,133.12 points, while the Nifty rose by 219.60 points, or 0.89%, to settle at 24,768.30 points.
Among the sectoral indices, FMCG (Fast-Moving Consumer Goods), private banking, and consumer durables emerged as the top performers. On the other hand, sectors like media, metal, and pharma lagged behind, according to data from the National Stock Exchange (NSE).
Vinod Nair, Head of Research at Geojit Financial Services, attributed the rally in the FMCG sector to a combination of easing food inflation, a price hike by FMCG companies, and a recent correction in valuation. The market’s sharp recovery, he explained, was led by index heavyweights, and investors were increasingly optimistic about the prospects of consumer spending picking up during the upcoming festive season.
The optimism also reflected a wider sense of hope for the Indian economy, driven by expectations of higher consumer spending during the holidays. Additionally, the anticipation of increased US government spending provided a boost to the IT sector, with major tech stocks seeing increased activity.
India’s retail inflation in November showed signs of moderation, clocking in at 5.48% compared to 6.21% in October, aligning with the Reserve Bank of India’s target range of 2-6%. This easing inflation has further fueled market optimism, with analysts eyeing the potential for economic growth, especially in consumption and investment, in the upcoming months.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said that factors such as the US economic policy, recovery in domestic consumption, and inflation would be crucial to watch in the coming months.
Ajit Mishra, SVP of Research at Religare Broking, maintained a positive outlook on sectors such as IT and banking, after the strong performance observed in Friday’s market session. This rally in the indices helped reverse some of the recent losses, with the market rebounding by a few percentage points over the last four sessions.
Despite the recent uptick, the Sensex remains nearly 4,000 points below its all-time high of 85,978 points. The recent bearish trends in the market have been attributed to factors like persistent fund outflows, disappointing Q2 earnings from India Inc., and elevated inflation.
(ani)
