Benchmark indices Sensex and Nifty zoomed by around 0.75% tracking the rally in Wall Street as markets bet that Fed will ultimately decide to put a pause on further rate hikes. Almost all indices, barring IT, gained in today’s trading with Bank, Finance, Pharma, and Auto topping the charts.
Vinod Nair, Head of Research at Geojit Financial Services commented on today’s market and said, “The domestic market rebounded with strong buying in banking, pharma, and consumer stocks, along with positive cues from global markets. The US market’s optimism was bolstered by better-than-expected retail sales, reflecting the robustness of the economy. Furthermore, jobless claims remain elevated and a decline in import prices raised hopes for a prolonged pause in interest rate hikes by the Fed, contradicting their announcement of potential future rate hikes made the previous day.”
On Wednesday, Fed had warned that it could raise interest rates two more times this year in its battle against inflation. It’s already hiked its benchmark rate to the highest level since 2007, which has helped slow inflation somewhat but has also caused severe pain in some areas of the economy.
In electronic trading on the New York Mercantile Exchange, the US crude oil benchmark rose by 13 cents, settling at $70.75 per barrel.
Indian shares advanced on Friday aided by broad gains across sectors, with benchmarks nearing record high levels, despite a drag in the IT sector. The optimism was felt among investors after economic data from the U.S. boosted bets that Fed may be less hawkish than expected.
The blue-chip Nifty 50 index was up 466 points to close at 63,384, while the benchmark S&P BSE Sensex rose 138 points to close at 18, 826. Eleven of the 13 major sectoral indexes rose. Broader indexes also extended gains, with the midcap index jumping to a new record high and smallcap index hitting fresh 52-week high levels.
All sectors participated in the optimism except for the IT and Realty sector which ended in the red with marginal drops. Bank and Finance indices surged by more than a percent along with Media with Pharma and Auto also registering a significant impact.
SBI Life and HDFC Life led the rally with Bajaj Finserv, Dr Reddy, Titan, and IndusInd Bank also ending among the top gainers. Wipro and TCS contributed to the drag in the IT index as they shed 2% and 1.2%, respectively, and were the biggest laggards.
Shares of LED lighting solution provider IKIO made a remarkable market debut on Friday, listing with a gain of nearly 38 percent, against the issue price of ₹285.
Asian shares logged moderate gains on Friday after Wall Street benchmarks swept higher, extending their longest rally in a year and a half.
Japan’s Nikkei notched a fresh three-decade high and its 10th consecutive weekly gain on Friday, as investors cheered the central bank leaving its ultra-easy policy settings unchanged.
The Bank of Japan (BOJ) kept intact its pledge to “patiently” maintain massive stimulus. The Nikkei closed 0.7% higher having touched a 33-year high in late trade. Its weekly gain was 4.5%. The broader Topix rose 0.3% on Friday and was up 3.4% for the week.
Stocks in China and Hong Kong rose on Friday in their best weekly performance in five months, as investor sentiment was warmed by hopes for more stimulus after the People’s Bank of China cut a few key policy rates this week.
China’s blue-chip CSI300 Index closed up 1.0% and the Shanghai Composite Index climbed 0.6%. Hong Kong’s benchmark Hang Seng Index was up 1.1%, while the China Enterprises Index added 0.9%. For the week, CSI300 Index and Hang Seng Index added 2.8% and 3.4%, respectively, for each its best weekly performance in five months.
Europe’s equities opened higher Friday, mirroring gains elsewhere, as investors mulled the interest rate outlook after a hectic week for global monetary policy.
UK’s benchmark FTSE 100 climbed in a broad-based rally on Friday, while a decline in top building materials supplier Travis Perkins following a profit warning capped the advance in the mid-cap 250 index.
