The Indian stock market experienced a significant bull run this week, marking a 1.7% increase and achieving its third consecutive weekly gain. The benchmark Sensex surged to an all-time high of 85,000, while the Nifty index also reached new heights.
The market is witnessing a shift in sector preferences, with large-cap stocks attracting more inflows compared to mid and small-cap stocks, which had previously dominated investor interest. Sectors such as public sector banks, defense, and railways, which had seen heavy participation earlier, are now being overshadowed by underperforming sectors including pharmaceuticals, private banks, and mid-sized IT firms. Analysts, including Krishna Appala from Capitalmind Research, suggest that these underperforming sectors, with their appealing valuations, could lead the market in the upcoming quarters.
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Metals emerged as the standout sector, with the CNX Metals index climbing over 6%, making it the week’s top performer. The CNX Auto sector also saw gains, increasing by 3.5%. However, the initial momentum in Bank Nifty following the recent Federal Reserve rate cut did not sustain, resulting in a flat performance by the end of the week.
On Friday, Indian equity indices closed lower as profit booking took place at elevated levels. At the close, the Sensex fell 264 points (0.31%) to 85,571, and the Nifty dropped 37 points (0.14%) to 26,178. The Nifty Bank index decreased by 541 points (1%) to 53,834.
The Indian rupee weakened slightly, trading at 83.70, down 0.04, despite the dollar remaining stable at 100.25. US jobless claims data showed marginal improvement, suggesting continued strength in the US economy. Experts note that the rupee may find support in the 83.80-83.90 range, with resistance between 83.50-83.60.
Gold prices remained steady to weak, trading around $2,665 in Comex, down $8, while in the domestic market, prices dipped by Rs 150 to Rs 76,100 after a strong rally earlier in the week, where gold surged by Rs 1,300 due to easing liquidity from the Fed’s policy changes.
The market responded positively to the Fed’s rate cut and stable economic indicators, which spurred foreign inflows and momentum in domestic markets. Additionally, China’s announcement of economic stimulus has further boosted investor confidence, resulting in a notable uptick in global markets, particularly in Asian indices.
Hrishikesh Yedve from Asit C Mehta Investment Intermediates remarked that the index has successfully closed above the breakout of the rising channel pattern on a weekly scale, indicating ongoing strength in the market.
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