Mumbai: After three consecutive weeks of losses, the Indian stock market made a strong comeback, closing the week with gains of nearly 2 per cent.
The recovery was driven by favourable global and domestic cues, instilling confidence among investors. The Nifty settled at 22,552.50, while the Sensex closed at 74,332.58, marking a significant rebound.
According to market watchers, among the key drivers, the global sentiment improved following reports of a delay in US tariffs and the possibility of further negotiations, which helped stabilise financial markets.
Additionally, a weaker dollar and a decline in crude oil prices further boosted investor confidence, said Ajit Mishra, SVP, Research, Religare Broking Ltd.
On the domestic front, the Reserve Bank of India’s (RBI) decision to infuse additional liquidity into the system added to the positive momentum.
“The combination of these factors led to a broad-based rally across sectors, with metal, energy, and pharmaceutical stocks emerging as the top gainers. The broader indices also posted impressive gains, rising between 2.6 per cent and 5.5 per cent,” Mishra mentioned.
Krishna Appala from Capitalmind Research said the market strength was driven by a broad-based recovery, with Nifty 50 stabilising near fair valuations, while mid and small-caps saw continued buying after recent corrections.
“Large caps appear well-positioned, with Nifty 50’s P/E below 20x, aligning with historical norms. Corporate balance sheets remain strong, and 10-12 per cent YoY earnings growth is expected to provide stability,” Appala added.
Sustaining this rally depends on earnings recovery and broader market sentiment.
While large caps appear better placed, the broader market may consolidate unless earnings growth picks up, said experts.
The upcoming trading week will be a holiday-shortened one, with market participants closely monitoring global developments in the absence of major domestic events.
Key factors to watch include fresh updates on tariff negotiations, geopolitical tensions, and their impact on the movement of the US dollar and crude oil prices, said experts, adding that given the prevailing scenario, investors are advised to maintain a positive yet cautious approach.
(IANS)
