Nifty, Sensex gain over 2.5 pc this week as crude prices ease; rupee stays strong
Mumbai, Aug 1
The Indian equity benchmarks posted strong weekly gains as crude prices eased, alleviating global inflationary concerns.
Nifty jumped 2.59 per cent during the week and edged up 0.27 per cent on the last trading day to reach 24,383. At close, Sensex was up 166 points, or 0.21 per cent, at 78,094. It added 2.68 per cent during the week.
The market recovery was broad-based, with large-cap stocks outperforming the broader market.
On a sectoral basis, metals, and automobiles led the rally, supported by an improving global outlook and easing energy costs. Domestic tech stocks faced late-week pressure from a rebound in global chipmakers, before ending the week with strong gains supported by attractive valuations.
Easing inflationary concerns due to correction in crude prices improved market sentiment, an analyst said.
"While the US Fed's decision to keep interest rates unchanged was largely in line with expectations, its commentary retained a hawkish bias, signalling restrictive policy settings if inflation fails to move sustainably toward its target," he added.
Meanwhile, the Indian rupee strengthened after unwinding of the crowded global AI trade during the week strengthened the case for foreign inflows into India's diversified equity market.
Domestically, strong IIP data, improving monsoon conditions, and encouraging corporate earnings supported market sentiment.
The market recovery can only be sustained if global uncertainties continue to ease lending stability to crude oil prices. Broadening of earnings growth beyond a handful of sectors will also influence market recovery, market participants said.
Broad market indices performed in line with benchmark indices, as Nifty Midcap100 added 2.10 per cent, while Nifty Smallcap100 jumped 2.46 per cent during the week.
The RBI's policy decision and PMI releases will provide key cues on growth and inflation trends. Investors will also remain keen on US labour market data in the coming week.
— IANS
Reader Comments
Crude price correction is a blessing for India. It directly helps control inflation and reduces import bill. This is good news for the common man too as fuel prices may ease. However, global uncertainties are still a worry. Let's keep following the data, don't jump blindly. 😊
Nice to see auto and metals leading the rally. This indicates domestic demand is holding up well. But honestly, I feel retail investors are not participating enough. The gains are concentrated in large caps. Let's watch if the rally broadens in the coming weeks.
As an expat watching Indian markets, this week's performance was quite impressive. The rupee strengthening is a positive signal for foreign investors. Though we must be mindful of the Fed's hawkish signals. India remains one of the top destinations for global capital in this environment.
The recovery is good but I wish it also reflected in the economy's ground reality. Many small companies are still struggling. Also, IIP data improving is good but let's not forget that employment generation is still a major issue. Markets and economy should progress hand in hand.
Good to see global investors rediscovering India's strengths! The unwinding of AI trades seems to be pushing flows towards our markets. With crude easing, many headwinds are turning into tailwinds. But I'd still keep a close eye on RBI's policy moves and global US economic data.
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