Benchmark equity indices staged a strong rebound this week, recouping the previous week’s losses as Brent crude oil prices declined following a pause in the West Asia conflict.
The Sensex surged 2,034.87 points, or 2.68%, to close at 78,094.64, its biggest weekly gain in four months (since the week ended April 10). The Nifty advanced 616.15 points, or 2.59%, to settle at 24,383.60. Brent crude fell 7% during the week to $89.95 a barrel.
In the previous week, the Sensex and Nifty had declined 2.68% and 2.33%, respectively.
“Unlike last week, the sharp decline in crude oil prices helped ease inflation concerns and lift market sentiment. While the US Federal Reserve’s decision to keep interest rates unchanged was largely in line with expectations, its commentary retained a hawkish bias, indicating its willingness to keep policy restrictive if inflation does not move sustainably towards its target,” said Vinod Nair, Head of Research at Geojit Investments.
Nair added that the unwinding of the crowded global AI trade strengthened the case for foreign inflows into India’s diversified equity market, while a firmer rupee also supported sentiment.
The rally was aided by gains in global markets, robust domestic corporate earnings, sustained foreign institutional investor (FII) buying, lower crude oil prices and the appreciation of the rupee, said Ajit Mishra, Senior Vice-President – Research, Religare Broking.
However, investors remain watchful of further earnings announcements and key global macroeconomic developments for fresh directional cues, he added.
FII Inflows
Investors’ wealth increased by Rs 10.3 lakh crore during the week, including Rs 2.76 lakh crore on Friday alone, taking the BSE’s total market capitalisation to Rs 485.97 lakh crore.
The recovery was broad-based, though large-cap stocks outperformed the broader market. The BSE MidCap and BSE SmallCap indices gained 2.17% and 1.27%, respectively.
Foreign portfolio investors bought shares worth Rs 8,960 crore during the week, while domestic institutional investors were net buyers of Rs 10,875 crore, according to provisional exchange data.
Sector Performance
All sectoral indices ended the week in positive territory. IT was the top performer, rising 6.75%, followed by auto, pharma, healthcare and consumer durables.
Bajaj Finance, Infosys, Bajaj Finserv, Eternal and Mahindra & Mahindra were the top Sensex gainers, rising as much as 12.74% during the week. On the other hand, BEL, Adani Ports, Jio Financial Services, Power Grid and ITC were the biggest losers, falling up to 4.26%.
“The sustainability of the domestic market recovery will depend on easing global uncertainties, stability in crude oil prices and a broadening of earnings growth beyond a handful of sectors,” Nair said.