 "Nifty 50")
The benchmark Nifty50 index closed above the 22,000 mark after a month amid gains in auto and information technology (IT) stocks.
Both the Nifty and Sensex added 1.2 per cent this week even as the optimism around early rate cuts by the US Federal Reserve faded following higher than expected inflation data.
The broader market — Nifty Smallcap 100 and Nifty Midcap 100 — underperformed this week, declining 0.5 per cent and gaining 0.5 per cent, respectively.
The Sensex ended the latest session at 72,427, gaining 376 points or 0.5 per cent. Nifty, on the other hand, ended the session at 22,040, a gain of 130 points or 0.6 per cent.
Nifty closed above the 22,000 mark for the first time after January 16.
The gains in Sensex were largely contributed by Larsen and Toubro (L&T), which rose 2.7 per cent; Infosys, up 1.5 per cent, and Mahindra & Mahindra (M&M), which rose 3.9 per cent.
More From This Section
M&M extended this weekly gain to 11.5 per cent following a supply deal for electric vehicle parts with Volkswagen.
State Bank of India (SBI) rose 4 per cent this week after it posted a strong earnings outlook.
The stock also got a boost after brokerages came out with a bullish outlook on the back of robust SUV sales. However, they flagged a moderate revenue outlook for its tractor business.
HDFC Bank, ICICI Bank, and Maruti were the other big contributors to Sensex's gain.
“Indian markets showed resilience despite volatility. The third quarter earnings season has ended on a buoyant note, with Nifty delivering a strong beat with a 17 per cent year-on-year (Y-o-Y) net profit growth versus estimates of about 11 per cent. We expect market sentiment to strengthen further as the prospect of a pre-election rally is quite strong. Two important pre-poll surveys predict a more than comfortable majority (272+ seats) for the incumbent BJP-led NDA. Nifty is all set to touch new highs next week,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
Analysts said investors are rotating into largecaps as mid and smallcaps have run way ahead of their fundamentals, and certain largecaps still offer some value comfort.
Global markets rose after a drop in US retail sales tempered investor worries about overheated consumer demand.
The 10-year US bond yield, after declining for the previous two sessions, rose and was trading at 4.3 per cent. The yields rose after Federal Reserve Bank of Atlanta President Raphael Bostic raised concerns about whether inflation is heading sustainably to the Fed’s inflation target.
Bostic said there's no rush to cut interest rates with the US labour market and economy still strong.
Further, the Fed official said the inflation rate will continue to decline, but more slowly than the pace implied by the markets.
From now on, market trajectory will depend on 10-year US bond yield and whether domestic investors will continue buying.
“We suggest maintaining a positive yet cautious stance as Nifty is set to retest its record high. We need sustainability above 22,150 to end the consolidation and march towards the 22,500 zone, or profit-taking may resume. Traders should closely watch the banking index for cues, while others may continue to play a supportive role on a rotational basis. Besides, the performance of global indices, especially the US, will remain on their radar,” said Ajit Mishra, senior vice-president of Religare Broking.
