Benchmark stock market indices extended their winning streak for the fifth consecutive session, closing the week on a high note, powered largely by heavyweight banking and financial stocks. Investor sentiment remained upbeat, buoyed by global cues and expectations of favorable monetary policy shifts. The S&P BSE Sensex climbed 557.45 points, or 0.73%, to settle at 76,905.51, while the NSE Nifty50 rose 159.75 points, or 0.69%, to end at 23,350.40. This rally reflects growing confidence in India’s economic resilience, despite ongoing global uncertainties.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that the market’s recovery was driven by multiple factors, including the anticipated reduction in global risk-free rates and the weakening US dollar index. These elements are creating a more favorable environment for emerging markets (EMs), leading to a reversal in foreign institutional investor (FII) behavior — from net sellers to net buyers. Nair further noted that dovish signals from the US Federal Reserve, which hint at two potential interest rate cuts later this year, have contributed to this shift by improving global liquidity and boosting risk appetite among investors.
Several heavyweight stocks led the market surge. SBI Life Insurance Company topped the gainers' list, rallying 3.43%, supported by robust financial performance and strong growth prospects in the insurance sector. NTPC, formerly known as National Thermal Power Corporation, advanced 3.29%, driven by increased electricity demand and operational efficiency. Oil and Natural Gas Corporation (ONGC) surged 2.72%, benefiting from rising global crude oil prices and improved domestic production. Bajaj Finance climbed 2.67% after posting impressive loan growth figures and maintaining strong asset quality, reinforcing investor confidence in the non-banking financial company (NBFC) space. Bharat Petroleum Corporation Limited (BPCL) rounded off the top gainers, rising 2.56%, buoyed by a pullback in global oil prices and resilient refining margins, which supported optimism about improved profitability.
On the flip side, some key stocks experienced losses due to profit booking and sector-specific challenges. Trent Limited led the losers’ list, falling 1.60%, following a strong rally in the retail sector earlier in the week. Mahindra & Mahindra (M&M) declined 1.45%, pressured by concerns over rural demand slowdown and rising input costs affecting margins in the automobile segment. Wipro slipped 1.38% as IT stocks continued to face headwinds from global economic uncertainties, weak deal pipelines, and persistent margin pressures. Hindalco Industries lost 1.27%, affected by declining global aluminum prices and worries over slowing demand in key international markets, especially China. Infosys (INFY) completed the list of top losers, shedding 1.25%, as cautious investor sentiment prevailed ahead of its quarterly earnings report.
Sector-wise, energy, pharmaceuticals, and banking stocks emerged as the best performers. Energy stocks rallied on the back of rising crude oil prices and stronger refining margins, while pharmaceutical companies benefited from consistent demand and export growth, particularly in US markets. Banking stocks, led by private and public sector giants, gained momentum due to improved credit growth and stable asset quality. In contrast, the information technology (IT) and fast-moving consumer goods (FMCG) sectors lagged behind. IT stocks continued to underperform due to a challenging global environment, while FMCG companies faced pressure from rising raw material costs, which impacted margins despite stable demand.
Midcap and smallcap indices outshone their larger counterparts, climbing between 1.5% and 2%, fueled by strong earnings reports, renewed investor interest, and attractive valuations. This trend signals a growing appetite for higher-risk, high-growth companies, reflecting confidence in the broader economic recovery.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd., advised traders to adopt a selective approach as the Nifty approaches a critical resistance level of around 23,400. He emphasized that the recent sharp rally warrants caution, suggesting that investors focus on stocks with favorable risk-reward ratios rather than chasing momentum-driven gains. Mishra underscored the importance of stock-specific strategies, particularly in sectors showing resilient performance and strong growth potential.
Looking forward, market participants will closely monitor a slew of domestic and global economic data, corporate earnings, and commentary from the US Federal Reserve. The sustainability of this rally will depend on continued FII inflows, global market stability, and clarity on future interest rate cuts. Additionally, geopolitical developments, currency movements, and oil price fluctuations will play a key role in shaping market sentiment in the coming weeks.
The positive momentum observed this week signals optimism about India’s economic outlook, supported by strong corporate earnings, improving global conditions, and proactive monetary policies. However, investors are likely to tread carefully, balancing growth opportunities with potential risks on the horizon.
