The Indian equity indices experienced a rebound on Friday, recovering from their earlier lows after Iran denied any retaliation by Israel. The Sensex rose by 600 points or 0.83%, closing the day’s trading at 73,088.33. Similarly, the Nifty 50 closed 151 points or 0.69% higher at 22,147.00. Notable gainers included Bajaj Finance, M&M, Maruti Suzuki, HDFC Bank, and JSW Steel.
The Indian Volatility Index (India VIX) also closed 3.14% higher. In contrast, the Nifty Bank closed the session with a 505-point increase at 47,574.15. However, the Nifty Midcap 100 experienced a loss of almost 300 points or 0.61%, settling at 48,696.95. Bank and financial services stocks played a significant role in driving the indices higher, while midcap stocks in the broader indices closed in the red.
According to Rupak De, Senior Technical Analyst at LKP Securities, a piercing line pattern has formed on the daily chart, suggesting a bullish reversal after a correction. Additionally, the indicator has surpassed the 55EMA, indicating a positive short-term trend. De predicts that the Nifty may recover towards 22,300, and a breakthrough above this level could trigger a sustained rally towards 22,600. On the downside, support is expected at 22,000. Despite global weakness, the Indian markets showed resilience, driven by large-cap stocks and the expectation of limited escalation following Israel’s actions against Iran.
However, concerns remain due to elevated oil prices and the associated inflation risks. Gold prices have been rising due to safe haven demand. Foreign institutional investors (FIIs) have continued to be risk-averse, and global sentiment remains subdued due to a robust US economy and persistent inflation, dampening hopes of a near-term Fed rate cut. Mid and small caps have seen weakness as Q4 earnings expectations remain muted, according to Vinod Nair, Head of Research at Geojit Financial Services.
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