Indices bounce back after 3-day fall led by IT, banking & financial stocks

Indian equity indices reversed their losses of the last three sessions to turn green on Friday, led by the gains in IT, banking and financial stocks and prompted by upbeat risk appetite after US inflation print came within market expectations.

The BSE Sensex ended 303 points or 0.51% higher at 60,261, while Nifty50 rose 98 points or 0.55% to settle at 17,957.

From the Sensex pack, Tata Steel and IndusInd Bank were the top performers, rising about 2%. Infosys, UltraTech Cement, NTPC, Bajaj Finance, HUL and TCS were the other top gainers.

On the other hand, Titan, Nestle, L&T, Axis Bank, Reliance and Asian Paints ended with cuts.

Sector-wise, the Nifty PSU Bank rose 1.35% and Nifty Metal surged 1.27%. Auto, financials, media, oil & gas and IT stocks also closed higher. In the broader market, Nifty Smallcap50 advanced 0.32% while Midcap50 ended flat.

Expert Take
“Easing inflation and brighter Q3 numbers projected by the second set of IT majors are outweighing the cautiousness of the market. CPI in India and US cooled off, thereby bolstering expectations of a less aggressive policy. Falling treasury yields and dollar index are raising investors’ sentiments,” said Vinod Nair, Head of Research at Geojit Financial Services.

Rupak De, Senior Technical Analyst at LKP Securities, said, “The Nifty sustained below the 50 EMA on the daily timeframe, confirming an ongoing bearish trend. The resistance is visible at 18,300, whereas on the lower end, support is visible at 17,800. Any breakout in either direction would create a directional trend in the market.”

Global Markets
Shares advanced Friday in Asia after news that US consumer inflation slowed last month pushed Wall Street benchmarks higher.

Hong Kong's Hang Seng rose 0.5% to 21,621.96 and the Shanghai Composite index climbed 0.5% to 3,180.27. The Kospi in Seoul added 0.4% to 2,388.58, while Australia's S&P/ASX 200 jumped 0.7% to 7,328.10.

However, Tokyo's Nikkei 225 index fell 1.3% to 26,119.52 on speculation that the Bank of Japan might relent and tighten its ultra-loose monetary policy.

The blue chip FTSE 100 rose 0.5%, with the index on track to rise for the second straight week in a chipper start to the year.

Currency Watch
The Indian rupee strengthened 0.28% against the dollar, and quoted at 81.32 per dollar, as benign US inflation reading reinforced expectations of a smaller rate hike by the Federal Reserve next month.

Crude Impact
Crude oil prices on Friday rose by Rs 11 to Rs 6,402 per barrel in futures trade as participants increased their positions following a firm spot demand. On the Multi Commodity Exchange, crude oil for January delivery traded higher by Rs 11 or 0.17% at Rs 6,402 per barrel in 5,314 lots.

Globally, West Texas Intermediate crude oil was up by 0.14% at USD 78.50 per barrel, and Brent crude traded 0.08% higher at USD 84.10 per barrel in New York.

(With inputs from agencies)