Dalal Street stronger this week on sectoral bounces, easing dollar outflows – News Air Insight

India’s equity indices ended higher on Friday, posting their best weekly performance since the end of June, aided by a rebound in beaten-down information technology and bank stocks and a decline in foreign institutional selling.

The second quarter earnings announcements over the next three weeks will determine whether the recent strength has more legs to it, said analysts.

On Friday, the NSE Nifty rose 103.55 points, or 0.4%, to close at 25,285.35. BSE’s Sensex ended 328.72 points, or 0.4%, higher at 82,500.82. Both indices gained 1.6% during the week.

“Market sentiment has turned bullish as the Nifty moved above the 25,000 mark, triggering renewed buying interest and driving the indices higher,” said Aamar Deo Singh, senior vice president of research at Angel One.

The Nifty IT index rose 4.9% this week, while the Nifty Bank index gained 1.8%. “The Nifty Bank is now starting to outperform, while the IT index appears to have bottomed out and is beginning to recover, aiding Nifty’s up move,” said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services.

India’s Volatility Index, popularly known as the fear gauge of the market, eased by 0.2% to 10.1.

Nifty Resistance near 25,500

The measure declined nearly 4% this week, suggesting traders see lower risks to the market in the near term.

Foreign portfolio investors net bought shares worth Rs 459.2 crore on Friday. In the past four trading sessions, these investors bought shares worth nearly Rs 3,950 crore. Domestic institutions bought Rs 1,707.8 crore.

With selling by foreign investors easing over the past two sessions and their derivative positions signalling oversold levels, a short-covering rally cannot be ruled out as the Nifty approaches its resistance near 25,500, Taparia said. “A sustained move above this level could see the index advance toward 26,000.”

Broader market indices Nifty Midcap 150 gained 0.4% and Nifty Small-cap 250 rose 0.6% on Friday. Of the total 4,343 stocks traded on the BSE, 2,424 advanced and 1,766 declined, while 153 remained unchanged.

Elsewhere in Asia, shares fell in Japan (1%), China (0.9%) and Hong Kong (1.7%). The markets rose in South Korea (1.7%) and Taiwan (0.9%).

The pan-Europe index Stoxx 600 was 1.2% down at the time of going to print.