After opening flat on Friday, benchmark indices staged a strong comeback, with the BSE Sensex surging 901.62 points to 81,853.61 and the NSE Nifty50 rising 286.15 points to 24,895.85 by 11:00 am.
This sharp rally follows a volatile trading week and signals renewed optimism, particularly in the IT and FMCG sectors.
What’s Fueling the Rally?
Friday’s gains come after a dip on Thursday driven by global concerns. Analysts attribute the rebound to widespread buying and investors adopting a “buy-on-dips” strategy amid ongoing volatility.
“Even in weak market phases, domestic demand-driven sectors like financials, telecom, and aviation show resilience,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He noted strong performances by large caps like ICICI Bank, Bharti Airtel, and InterGlobe Aviation.
IT stocks led the rally, with Persistent Systems, Infosys, and Tech Mahindra gaining over 2%. FMCG stocks, which lagged in the previous session, also bounced back. All Nifty sectoral indices, except pharma, were trading in positive territory.
Outlook: Sustainable or Temporary?
The markets have climbed nearly 14% from their March lows, but analysts caution that foreign investor inflows may be slowing. Vijayakumar pointed to recent FII outflows and rising US and Japanese bond yields as causes for concern over global debt levels.
Despite global uncertainty, India’s economic fundamentals remain strong. “Steady GDP growth, cooling inflation, and the possibility of interest rate cuts are supporting investor confidence,” he said.
Key Technical Levels
Technically, the Nifty is at a critical level. Anand James, Chief Market Strategist at Geojit, noted that the 20-day moving average held, sparking Friday’s rally. A breakout above 24,810–24,860 could confirm further upside, while a drop below 24,580 may trigger a slide to 24,060.
Axis Securities’ Akshay Chinchalkar observed Thursday’s long lower shadow as a sign of buying interest. He identified 24,050 as key support and said a close above 24,946 would revive bullish sentiment.
Prashanth Tapse of Mehta Equities believes the worst of the global-led selloff is likely over. As long as the Nifty stays above 24,386, the trend remains neutral to positive, with 25,000 as the next target.
Stock-Specific Action and Fund Flows
Sun Pharma fell after posting a Q4 profit decline, while ITC rose due to a one-time gain. TTML continued its rally amid talk of fresh capital infusion.
Investors are eyeing upcoming earnings from Ashok Leyland, BEML, Glenmark, GNFC, and JSW Steel.
On the institutional front, FIIs sold shares worth Rs 5,045 crore on Thursday, while domestic institutions remained net buyers, picking up shares worth Rs 3,715 crore.