Tracking positive cues from global peers on elevated bets of a US rate cut by March 2024, Indian equity indices advanced to new all-time highs on Friday, led by the banking, financial and IT stocks.
The market capitalization of all listed companies on BSE increased by Rs 2.76 lakh crore on Friday and by Rs 8.55 lakh crore this week to Rs 357.78 lakh crore.
The 30-share BSE benchmark Sensex advanced 970 points or 1.37% to settle at 71,484. The broader NSE Nifty surged 274 points or 1.29% to end at 21,456.
From the Sensex pack, HCL Tech, TCS, and Infosys were the top gainers, rising 5-6%. SBI, Tata Steel, Tech Mahindra, NTPC, and Wipro also closed higher. On the flip side, only Nestle, Bharti Airtel, Maruti, and ITC closed in the red.
The rise in IT stocks comes after the Fed acknowledged it is making real progress in easing inflation, while maintaining a rate pause.
On the sectoral front, Nifty IT rallied 4.5%, while Nifty Metal, and Nifty PSU Bank surged over 2%. Whereas Nifty Auto, FMCG, Media, and Realty declined.
Newly listed IREDA shares ended in a 10% lower circuit after rising for 7 consecutive days.
Punjab National Bank (PNB) closed 1.5% higher as it became the third PSU lender to cross the Rs 1-lakh-crore market cap after its shares surged nearly 80% in the last six months.
Global markets
Asian shares jumped to a four-month peak on Friday as sharp declines in the dollar and US yields extended a Federal Reserve-fuelled rally, but pushback on rate cuts from central banks in Europe could deal a blow to the global pivot hopes.In Asia, Japan’s Nikkei rose 1%. Chinese bluechips gave up earlier gains to be 0.3% lower and hit a fresh five-year trough. Hong Kong’s Hang Seng index, however, rebounded 2.2%.
Europe’s broad STOXX 600 benchmark rose 0.37% to a 23-month high, and S&P 50 futures rose 0.2% after the benchmark had reached its highest since January 2022 on Wednesday around 2% off an all time high.
Treasury yields hit multi-month low
Treasury yields slid to multi-month lows as bond investors braced for rate cuts in 2024.
The US 10-year yield was down 2 bps at 3.913%, on track for a 33 basis point weekly fall, its most since pandemic volatility in March 2020.
Experts view
“The buoyancy continued in the market as investors were expecting the clouds over US economic growth to recede by H2CY24 and that the economy would achieve a soft landing aided by normalization in monetary policy. The IT index outperformed expectations of a rise in demand in the US economy,” said Vinod Nair, head of research at Geojit Financial Services
Jatin Gedia, technical research analyst at Sharekhan, said, “On the daily charts we can observe that the Nifty has been stretching higher towards 21,500. The rally has been perpendicular in nature and still we see no signs of weakness on the price front.”
“The daily momentum indicator has a positive crossover however it has not registered a new high indicating that a negative divergence is in process. However, until we get signs of weakness on the price front we shall continue to ride the upmove. On the upside, the short term target is placed at 21,500,” Gedia added.
Rupee Vs Dollar
The Indian rupee strengthened 0.40% versus the US dollar, and quoted at 82.99 per dollar as heavy dollar inflows and a sharp rally in domestic equity markets to fresh record highs aided the domestic currency.
Crude oil
Oil prices rose on Friday, on track to notch their first weekly rise in two months after benefiting from a bullish forecast from the International Energy Agency (IEA) on oil demand for next year and a weaker dollar.
Brent futures rose 21 cents to $76.82 a barrel. US West Texas Intermediate (WTI) crude also climbed 21 cents, to $71.79.
(With inputs from agencies)
