It helped Indian benchmark indices end the week in the green. According to experts, a robust rebound of 2,000 points from the lows was a strong indicator of how the buy-on-dips strategy was yielding well in the market, especially on Saturday.
With inflation coming within the RBI's tolerance level and an expectation of further ease in food prices on account of seasonal corrections in vegetable prices, it could build up the expectation for ease in monetary policy in February," says Vinod Nair, Head of Research, Geojit Financial Services.
Nifty bounced sharply by more than 2 per cent from the day's low in its last trading session this week, recovering sharply from an important dip during the session. That's how it ended with 220 points up at 24,768 (+0.9 per cent).
Buying into FMCG, IT, and banking helped the recoveries even though the sentiments of the market were generally guarded.
The intraday sell-off in Indian equities followed weakness across Asian markets, which posted steep losses amid a stronger dollar, rising US Treasury yields and continued skepticism over China's economic revival," said Siddhartha Khemka from Motilal Oswal Financial Services Ltd.
The vagueness of China's stimulus plan had the metal stocks pained as the Nifty Metal index fell by 0.7 per cent. Sensex gained 843.16 points or 1.04 per cent to close at 82,133.12 on Friday. During the session, BSE's benchmark had touched an intra-day high of 82,213 after recovering from a low of 80,082.
Midcap and smallcap stocks lagged behind largecaps. Nifty midcap 100 index closed at 58,991, down 30 points or 0.05 per cent. and the Nifty smallcap 100 index closed at 19,407, down 59 points or 0.30 per cent.
According to experts, a gradual recovery in IIP and core sector data is pointing towards a better H2 earnings performance than subdued H1 FY25. Currently, FII selling is believed to have subsided at least in the short to medium term, which will add further impetus to the sentiment, they added.
This marked a fresh high for the Nifty IT index which rallied almost 3% during the week after the inflation data met expectations, boosted hopes that the Fed was most likely going to cut next week.
Meanwhile, gold fell sharply as profit booking increased on mixed signals from US economic data. MCX Gold dropped from Rs 79,000 to Rs 77,450. The current weakness indicates that MCX may trade in the range of Rs 76,000– Rs 78,000. Short-term outlook is still cautious on account of continued market volatility.
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