The Indian equity market staged a remarkable recovery on Friday, erasing its weekly losses and emerging as the top performer among Asian markets. The key indexes, including the Nifty 50 and S&P BSE Sensex, posted significant gains, reflecting renewed investor confidence in the domestic economy. The market rally was driven by a combination of factors, including strong quarterly earnings reports from major companies and positive developments in economic policies.
Analysts cited an uptick in manufacturing activity and robust consumer spending as pivotal factors contributing to the bullish sentiment. The technology and banking sectors were among the noteworthy gainers, attracting substantial investor interest. This uptick was further bolstered by favorable global market trends and foreign investment inflows.
“The Indian market has demonstrated resilience in the face of global uncertainties,” said Rajesh Sharma, Chief Investment Officer at Axis Securities.
Market gains driven by fundamentals
“The strong fundamentals of the domestic economy, coupled with the government’s pro-growth policies, have instilled confidence in investors.”
The Nifty 50 index closed the day with a gain of 1.5%, while the S&P BSE Sensex rose by 1.3%.
The broader market also participated in the rally, with the Nifty Midcap 100 and Nifty Smallcap 100 indexes advancing by 1.2% and 1.1%, respectively. Market experts believe that the positive momentum is likely to continue in the near term, supported by the ongoing economic recovery and the expectation of further policy support from the government. “We expect the market to maintain its upward trajectory, driven by the improving economic outlook and the government’s focus on infrastructure development and financial sector reforms,” said Priya Menon, Head of Research at HDFC Securities.
However, analysts also cautioned investors to remain vigilant and monitor global developments, particularly the progress of trade negotiations between the United States and China, which could have an impact on market sentiment. The Indian rupee also strengthened against the US dollar, reflecting the positive market sentiment and the increased inflow of foreign funds. The domestic currency closed at 72.50 per dollar, appreciating by 0.3% from its previous close.
As the market enters a new week, investors will closely watch the upcoming macroeconomic data releases, including the GDP growth figures and the manufacturing and services sector PMI numbers, for further cues on the health of the Indian economy.
