Indian equity markets demonstrated resilience this week,overcoming initial turbulence linked to the implementation of the closing auction system (CAS). Despite a slight dip on Friday, both the Nifty and Sensex managed to secure weekly gains, with the Nifty rising 0.8% and the Sensex climbing 0.5% over the week.
On Friday,the Nifty fell by 65.35 points,or 0.3%,closing at 24,570 points, while the Sensex dropped 455.59 points, or 0.6%,to finish at 78,499 points. The CAS, aimed at curbing extreme volatility during market close, initially unsettled investors, but sentiment improved as the week progressed.
Rajesh Palviya,head of research at Axis Securities, noted that easing geopolitical tensions and declining global oil prices contributed to a more optimistic market outlook. He remarked, "Domestically, the implementation of CAS created some uncertainty,but Friday's trading session ended on a normal note,and we expect market functioning to remain stable going forward."
Brent crude oil prices fell to approximately $81.8 per barrel,down nearly 0.9% from previous day, further bolstering investor confidence. Aamar Deo Singh,senior vice president of research at Angel One, highlighted broad-based rally across the markets, particularly in mid and small-cap stocks. He stated, "Improved global sentiment due to easing of geopolitical tensions supported buying interest in pockets - financials, pharma, and IT."
The Nifty Midcap 150 index rose by 0.2% this week, while the Nifty Small-cap 250 remained flat on Friday. These indices reported gains of 1% and 2.4%,respectively, for week. The market's fear gauge,the Nifty Volatility Index (VIX), saw a slight increase, climbing to 12.18.
Investor activity reflected a positive trend, with foreign portfolio investors net buying shares worth ₹480 crore and domestic institutions acquiring ₹236 crore in equities. Singh advised caution regarding geopolitical uncertainties but expressed optimism about the market's current levels .
Palviya remains bullish on the Nifty, predicting it could surpass 24,700 points . He suggested that sustained movement above this threshold could lead to levels between 24,900 and 25,000,while indicating 24,450 as a stop-loss for long positions. He continues to favor sectors such as auto, pharma,new-age companies,and IT, while also identifying select metal and power stocks as promising .
In broader Asian markets, China saw a gain of 1%,while Hong Kong rose by 0.5%. Conversely, Japan experienced a slight decline of 0.1%, and South Korea and Taiwan fell by 0.6% and 0.4%,respectively. Meanwhile, the pan-European index Stoxx 600 was up 0.6% at the time of reporting.
