Equity benchmarks Sensex and Nifty overcame bouts of volatility to settle in the green for the second straight session on Friday, propped up by robust demand for the metal, banking and financial stocks amid a firm trend in global equities.
Besides, a strengthening rupee and lower crude prices in the international markets also influenced sentiments here, traders said. In a volatile trade, the 30-share BSE Sensex rose 355.06 points or 0.62 per cent to settle at 57,989.90. During the day, it hit a high of 58,178.94 and a low of 57,503.90.The broader NSE Nifty gained 114.45 points or 0.67 per cent to end at 17,100.05.
"The Nifty witnessed a volatile day of trade today. It witnessed sharp swings in both directions and ultimately closed in the green for the second consecutive day...We believe that the pullback rally has some more steam left and the Nifty is likely to carry on this positive momentum next week as well," said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas. HCL Tech led the Sensex gainers' chart, spurting 3.58 per cent, followed by UltraTech Cement, Nestle India, Tata Steel, Kotak Bank, ICICI Bank, Bharti Airtel and HDFC twins.
In contrast, ITC, Maruti, NTPC, Asian Paints and Sun Pharma were among the main laggards, shedding up to 1.51 per cent. In the broader market, the BSE midcap gauge climbed 0.29 per cent and smallcap index advanced 0.69 per cent. Among sectoral indices, realty jumped 3.16 per cent, metal 2.42 per cent, bankex (1.22 per cent), IT (1.10 per cent) financial services (1.01 per cent) and commodities (1.37 per cent).
FMCG, auto and healthcare chalked up losses. After showing high volatility at the swing low of 16,850 levels on Thursday, Nifty showed a sustainable upward move with volatility on Friday and closed the day higher, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Markets were volatile and moved with a positive bias as investors resorted to select buying. European indices and other Asian peers accumulated significant gains, which enthused local traders in a big way.
"Following the sharp rebound in the global markets, the domestic indices took a breather in hopes of relief from the global banking turmoil. Global equities reversed their selling streak on reports of a rescue package for the beleaguered First Republic Bank, along with aid provided to Credit Suisse from the Swiss Central Bank, which would soothe concerns over global financial stability. "On the other hand, the ECB further raised its rates by 50 bps, indicating its preparedness to provide liquidity to banks upon necessity," said Vinod Nair, Head of Research at Geojit Financial Services.
Elsewhere in Asia, equity markets in Shanghai, Tokyo, Seoul and Hong Kong logged gains. Equity exchanges in Europe were trading in the green in mid-session deals. Major indices on Wall Street closed in the positive territory in the overnight trade. Global equities gained on Friday as government and institutional support to stem a potential banking crisis helped improve sentiments.
On a weekly basis, Nifty declined 1.8 per cent, falling for the second consecutive week, though it recovered partly from the intra-week low, said Deepak Jasani, Head of Retail Research, HDFC Securities. Meanwhile, international oil benchmark Brent crude rose 1.16 per cent to $75.57 per barrel. The rupee settled 18 paise higher at 82.58 against the US dollar on Friday.
India's banking system is expected to remain unscathed from the troubles in Credit Suisse as it has a very small presence in the country, experts said. Although Credit Suisse is more relevant to India's financial system than Silicon Valley Bank (SVB), it has very limited operations, according to a report by Jefferies India. Foreign Institutional Investors (FIIs) offloaded shares worth a net Rs 282.06 crore on Thursday, according to exchange data.
"What we are seeing is a relief rally backed by strong positive global cues as there are expectations that the US Fed may not take aggressive rate hike steps to tame inflation. Some of the concerns over the falling financial health of the US banking industry have also subsided, which further boosted the market sentiment. "Falling crude oil prices and recovery in the metal space on hopes of a revival in the Chinese economy is also providing some support to the struggling markets," said Amol Athawale, Technical Analyst (DVP), Kotak Securities Ltd.