The BSE Sensex gained 847.27 points, or 1.2%, to close at 72,568.45, off the record high of 72,720.96. The NSE Nifty was up 247.35 points, or 1.14%, to close at 21,894.55 after touching an all-time high of 21,928.25.
The Nifty IT index jumped 5.1% with Infosys soaring 8% and TCS rising 3.9% after their December quarter results and the associated commentary kept hopes alive that the environment may not deteriorate further.
“The numbers were nothing stellar but sometimes no bad news is also well received by the markets with loud applause,” said Aamar Deo Singh, head of advisory at brokerage AngelOne.
Foreign portfolio investors (FPIs) sold shares worth a net ₹340.05 crore on Friday. Domestic institutions were buyers to the tune of ₹2,911.19 crore.
Elsewhere in Asia, China lost 0.16%, Hong Kong fell 0.35%, South Korea was down 0.6% and Taiwan slipped 0.2% on Friday, mirroring the marginally lower closing on Wall Street after the US consumer price index advanced 0.3% in December and 3.4% from a year ago against estimates of 0.2% and 3.2%, respectively.
Fear Gauge up
This coupled with higher-than-expected jobs data for December released last week slightly dimmed expectations of early interest rate cuts by the US Federal Reserve, a key trigger for the market rally in the past few weeks. Financial markets expect the American central bank to cut its key policy rate by 25 basis points at its March 19-20 meeting.
“The higher-than-expected US inflation data acted as a mild dampener as investors have been expecting a US rate cut in March 2024,” said Singh. “We are likely to witness more volatile sessions ahead as the quarterly earnings season has kicked off, so a cautious approach at current record levels is the way forward.”
Brent crude prices were up nearly 3% at $79.55 a barrel after the US and UK launched strikes in Yemen over the recent attacks by Houthi rebels on ships in the Red Sea. The rebels, backed by Iran, have vowed to retaliate.
On Friday, the pan-Europe index Stoxx 600 was up 0.84%.
At home, NSE’s India VIX – a fear gauge – rose 2.58% to 13.10, suggesting traders are being cautious about the rise in the market in the near term. However, this index has fallen almost 9.7% year to date after the market paused following the record-breaking rally in December.
Some analysts do not see any reason to tone down their optimism in the near term.
The Nifty could go up to 22,300 in a few weeks, said Dharmesh Shah, head of technical research at ICICI Direct.
“We see things look positive for most constituents of the Nifty 50 index and ‘buy on dips’ should be the strategy for traders in the market currently,” said Shah.
The broader market also ended higher with the Nifty’s Midcap 150 rising 0.36% and Nifty Small-cap 250 gaining 0.37%. Out of the 3,942 shares traded on the BSE, 2,066 advanced, while 1,787 declined.