Benchmark indices rose on Friday, helping the equity market eke out modest weekly gains despite sustained foreign fund outflows and elevated crude oil prices. Most global markets rose as investors pinned hopes on US-Iran diplomatic efforts to reach a peace deal in West Asia.
The Sensex gained 232 points, or 0.3 per cent, to close at 75,415, while the Nifty 50 advanced 65 points, or 0.3 per cent, to settle at 23,719. On a weekly basis, the Sensex rose 0.2 per cent and the Nifty 50 added 0.3 per cent. A rebound in information technology (IT) stocks led the weekly recovery.
The broader market also advanced, with the Nifty Midcap 100 rising 1.4 per cent and the Nifty Smallcap 100 gaining 0.4 per cent for the week. Private financial stocks also gained ground, with Axis Bank and ICICI Bank rising 3.3 per cent and 1.6 per cent, respectively, during the week.
The Nifty IT climbed 4.3 per cent during the week after declining nearly 6 per cent in the previous week. The gains were on the back of value buying after a sharp correction amid concerns over artificial intelligence-led disruption.
Energy and financial shares also supported the market, with the Nifty Oil & Gas rising over a per cent during the week.
Market sentiment improved after reports suggested progress in talks between the US and Iran to end the nearly three month long conflict in West Asia. A senior Iranian source told Reuters that gaps between the two sides had narrowed, although disagreements remained over Tehran’s uranium stockpile and control of the Strait of Hormuz.
The Nifty 50 closed above its 50-day moving average for the first time in two weeks, signalling improving sentiment among investors.
“The rally is unlikely to sustain unless there is a bilateral diplomatic statement from Iran and the US regarding the peace talks, and crude oil prices decisively fall below $100 per barrel,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.
“Investors have bought IT stocks at lower levels this week, while large private banks gained as investors believe they can weather inflationary and higher-yield scenarios,” he added.
Brent crude traded above $100 but was below the $110 level.
Foreign portfolio investors sold shares worth ₹4,440 crore on Friday, while domestic investors injected ₹6,000 crore.
Analysts said while the headline indices remained largely unchanged, there was lot of sector specific action as investors rotate between sectors based on their assessment of the impact of elevated energy prices and global uncertainty.
Seven of the 16 major sectoral indices ended the week in positive territory. After IT, Nifty Realty was the biggest weekly gainer, rising 2.4 per cent.
“We remain constructive on sectors linked to India’s domestic capex and manufacturing themes, including Capital Goods, Industrials, Defence, and BFSI (Banking, Financial Services, and Insurance), where earnings visibility and policy support continue to remain favourable. Defensive segments such as Pharma and select FMCG are expected to provide portfolio stability amid market volatility, while IT Services may offer gradual recovery opportunities as global demand conditions improve,” said Anuj Jain, smallcase manager and chief investment officer and cofounder, Green Portfolio.