Indices saw a sharp ‘V’ shaped recovery on Friday, after being down by almost 1.5% in the first hour of trade. Both the Sensex and Nifty recouped initial losses quickly and closed the day higher by over 1%.
The Sensex initially fell by 1,207 points to 80,082.82 in the morning, in line with other Asian equity markets trading in the red. However, it rebounded 2,131 points (2.66%) to hit the day’s high of 82,213.92 before finally settling at 82,133.12, up 843.16 points or 1.04%.
Similarly, The NSE Nifty also jumped over 600 points from the day’s low of 24,180.80 to the day’s high of 24,792.30, after posting initial losses of 368 points. It ultimately ended the day at 24,768.30, up 219.60 points or 0.89%.
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This was the fourth consecutive week that the indices closed in the green. Investors’ wealth rose by Rs 1.26 lakh crore to Rs 459.42 lakh crore on Friday.
Foreign portfolio investors (FPIs) were net buyers of shares worth Rs 2,335.32 crore on Friday, while domestic institutional investors (DIIs) were net sellers of Rs 732.20 crore, as per provisional data by the exchanges.
Strong buying was seen in index heavyweights from the telecom, IT, FMCG, and banking sectors fuelled Friday’s rally. Experts attributed the recovery to a fall in retail inflation and rupee depreciation, among other factors. In contrast, equity indices in China and Hong Kong fell by 2% each, while Japan and Indonesia declined nearly 1% each.
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“The domestic market smartly recovered from the day’s low and moved out of the consolidation path, led by index heavyweights. A gradual easing in food inflation, a price hike by FMCG companies, and a recent correction in valuations supported the sector to outperform,” said Vinod Nair, Head of Research, Geojit Financial Services.
He added that a rebound from the lows suggests that the buy-on-dips strategy is working well in the market. 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,
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