Factors,
Domestic markets rose for the third day in a row on Friday as investors’ risk appetite increased as worries about a global banking crisis diminished.
The benchmark index, the Nifty, increased by more than 250 points, or 1.6%, to a 50-day high of 17,364, while the S&P BSE Sensex increased by more than 1,000 points, or 1.6%, to 58,976.
After the conglomerate decided to separate its financial services unit from the conglomerate, index-heavyweight Reliance Industries saw its overall gains largely pared as shares rose more than 4% in intra-day deals.
In addition, the larger markets displayed strength as small-cap stocks outperformed frontline indices.
However, given that the markets will experience data-driven movements in the coming days, analysts remain cautious regarding the sustainability of this recent rally.
“In the past two days, foreign institutional investors (FIIs) have become buyers because nifty valuations are now reasonable. The market is oversold and this could prompt short-covering and a strategic meeting in the close to term. However, FIIs will once again become sellers at higher levels, making a sustained rally unlikely. Coming days will see a ton of information or news driven market action. According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the March results season (Q4FY23), which runs from January 13 to April, as well as the RBI’s decision on interest rates on April 6th, “will trigger stock price movement.”
In the meantime, the following are the top five reasons why the market moved on Friday:
Strong Global Signals: US markets extended their winning streak for a second day in a row after renewed buying in technology names eased concerns over the banking crisis. The Dow Jones, S&P 500 and Nasdaq Composite climbed up to 0.7 percent overnight. In addition, an increase in weekly jobless claims has raised expectations of a slowdown in monetary policy tightening.
On Wall Street, tracking positive moves in Asia-Pacific markets also closed higher this morning. Major indices Nikkei 225, Topix, S&P 200, Kospi and Hang Seng rose up to 1 per cent each.
Rupee strengthens: The rupee appreciated by 24 paise to 82.1 in early trade on Friday on strong global cues and foreign inflows. The dollar index, which gauges the greenback’s strength against six major currencies, meanwhile rose 0.05 per cent to close at 102.2.
In their daily note, analysts at ICICI Securities stated, “We expect Nifty to resolve last 12 sessions’ upper upper band of 17,200-16,800, paving the way for a gradual up move towards 200 days-EMA placed at 17,500.” After a close approach to the lower band of a four-month descending channel, global negative news.
