After four days of losing streak, the Indian stock markets bounced back on Friday to end the week on a positive note mainly on the back of strong global cues coupled with some value buying by domestic investors at lower levels. The Bombay Stock Exchange (BSE) Sensex gained 584.71 points or 3.31% to close at 18,233.42 points while the National Stock Exchange (NSE) Nifty gained 179.8 points or 3.50% to close at 5,317.25 points. In spite of the strong closing on Friday, the Sensex closed the week with a loss of 128 points while Nifty gained 43 points during the week.
Dealers said investors took cue from the US markets which closed high on Thursday. The US fed cut helped the US markets end on a positive note on Thursday with Dow Jones Industrial Average (DJIA) adding 1.67% (up 207 points) to close at 12,650 points while the Nasdaq Composite added 1.74% to close at 2,389.86 points.
Also, as the European markets opened on a positive note in the afternoon, investor sentiments were boosted which helped the key indices to end on a positive note. After a strong opening, the Asian markets closed mixed on Friday with China’s Shanghai Composite losing 1.43% before closing at 4,320.77 points while the Hang Seng of Hong Kong gained 2.85% to close at 24,123.58 points. Dealers also said that liquidity injection from the refunds of the domestic IPOs to unsuccessful bidders will help restore the liquidity on the stock exchanges, which have dipped since the meltdown on January 22.
Among the sectoral indices, sectors which were completely ignored by investors for quite some time hogged the limelight on Friday. The BSE IT gained 214.10 points or 5.77% to close at 3,924.21 points while the BSE Tech gained 129.38 points or 3.94% to close at 3,410.36 points. The BSE Auto index added 171.13 points or 3.54% to close at 5,003.61 points.
Deven Choksey, MD, K R Choksey Securities said, ?It seems that selling in the markets have virtually ended as the leveraged position taken mainly by retail investors have been squared off. We also saw some value buying by domestic fund houses in the technology and IT space as the valuations of these stocks are really compelling. I see the markets volatile for the next week and technically 18,500 seems to be a good suport level for the Sensex. If it breaches this level next week and closes above, we might see 19,500 in the next week itself.?
One of the encouraging factors on Friday was that selling pressure from foreign institutional investors eased and they were net sellers to the tune of Rs 126 crore as per the provisional data released by the stock exchanges. Domestic institutional investors were net sellers at Rs 115 crore. They resorted to profit booking.
Some profit booking was witnessed in the BSE Small Cap and Mid Cap stocks due to which the overall markets breadth remained negative. Around 1,113 stocks advanced as against deline by 1,606 and 76 stocks remained unchanged.