The benchmark indices snapped a five-day losing streak amid buying at lower levels to log gains for the eighth consecutive week, effectively shrugging off the Budget shocker that dealt a blow with higher tax on long- and short-term capital gains.
Sustained inflows, particularly from mutual funds, high net-worth individuals, retail investors and family offices cushioned the downside in the past three sessions, said experts. After three sessions of selling, FPIs turned net buyers on Friday, with purchases of over ₹2,500 crore.
Market Surge
The Sensex rose 1,293 points or 1.62 per cent to settle at 81,332 on Friday. The Nifty ended at 24834, 1.76 per cent higher, after touching a fresh lifetime high of 24,861. Cash market volumes on the NSE were up 5.7 per cent. Midcap indices rose more than the Nifty even as the advance-decline ratio remained positive at 2.07:1.
“The market focus has moved on from the Budget to the ongoing earnings season,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “The Budget delivered a judicious balance between capital expenditure, fiscal prudence and welfarism while providing minor tweaks in individual tax rates and rationalising capital gains across asset classes.”
Top Nifty gainers on Friday include Shriram Finance (9.2 per cent), Cipla (5 per cent), Divi’s Lab (5.4 per cent) and Bharti Airtel (4.5 per cent). Gains were observed across sectors, with metals, auto, IT and pharma emerging as key winners.
Vinod Nair, Head of Research, Geojit Financial Services, said: “The domestic market experienced a substantial rebound post expiry, recovering from the recent losses incurred following the Union Budget. This upturn was driven by positive reactions to the better-than-expected US GDP, which augurs well for global demand. Investors are adopting a buy-on-dip strategy, refocusing on quarterly earnings and stock-specific trends.”
Global stocks rebounded somewhat on Friday and the tech-led stock rout paused on Friday as traders awaited key US inflation data for clues on the timing of interest-rate cuts amid fears of a sharper-than-expected economic slowdown. In Asian markets, South Korea, China and Indonesia settled higher, while Taiwan and Japan ended lower. European markets were trading in positive territory.
The next upside levels for Nifty are at 25000-25100 in the near term, with immediate support at 24650, said analysts.
“A long bull candle was formed on the daily chart, that has taken out the downward correction of the last five sessions in one day. This is a positive indication and signals a decisive upside reversal in the market post downward correction,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.