The benchmark indices posted a strong rally on Friday on the back of cooling US. inflation, a decline in the dollar index, and buying in IT stocks. The indices ended the week in the green, shrugging off concerns from the mpox outbreak and allegations from short-seller Hindenburg Research.
The Sensex reclaimed the 80,000 mark, gaining 1,331 points or 1.68 per cent, while the Nifty ended at 24,541, up 1.65 per cent. Broad market indices closed marginally higher than the Nifty even as the advance-decline ratio rose to 2.23:1.
All sectors ended in green with IT and Realty being the top gainers, up more than 2 per cent. The IT index rose 4.7 per cent during the week on expectations of imminent Fed rate cuts. The Metal index fell as the Supreme Court allowed states to levy tax and royalty on minerals, apart from central duties, and collect past dues.
“The moderation in US CPI inflation and drop in US 10-year yield helped the indices close the truncated week on a positive note. Sentiment improvements in Yen carry trade are likely to reduce the market volatility in the near term,” said Vinod Nair, Head of Research, Geojit Financial Services.
The Nifty reported a 5.2 per cent y-o-y increase in net profit for the June quarter, largely in line with expectations. The weak performance of oil and cement companies may cause a cut in the FY25 Nifty EPS estimate, said experts. The country’s CPI inflation cooled to 3.5 per cent in June, from 5.1 per cent the previous month.
Global stocks
Global stocks rose after encouraging US economic data calmed fears of an imminent recession.
European stocks were set for their biggest weekly gains in three months. Japanese stocks surged tracking substantial gains on Wall Street.
The World Health Organization declared the mpox outbreaks in Congo and elsewhere in Africa a global health emergency.
“During the global 2022 mpox outbreak that affected more than 70 countries, fewer than 1 per cent of people died. In the current episode, deaths are 3-4 per cent. In July-Aug 2022, the Nifty kept rising with little correction. The scare seems localised and may not have any significant impact on the global equity markets,” said Deepak Jasani, Head - Retail Research, HDFC Securities.
“Mpox is currently limited to the African countries but may become a cause of concern if it spreads to countries in Asia or the Western hemisphere. Bavarian Nordic has a vaccine for the virus, which is why markets may not see much impact in the near term,” added Sameer Kamdar, CEO, Smart Money.