Market Wrap: Sensex Adds 266 Points, Nifty Above 25,650; Indian Rupee Logs Best Week in Over 3 Years
The Indian stock markets, represented by the Nifty and Sensex, concluded Friday on a positive note, buoyed by significant developments in fiscal policy and currency performance.
Key Market Highlights
– Market Performance:
– BSE Sensex rose by 266 points, or 0.32%, closing at 83,580.
– Nifty 50 gained 51 points, or 0.20%, finishing the day at 25,693.
– Monetary Policy Update:
– The Reserve Bank of India (RBI) maintained its policy repo rate at 5.25%, a decision made unanimously. The monetary policy stance remains neutral.
– RBI Governor Sanjay Malhotra mentioned a comfortable inflation outlook, projecting CPI inflation at 2.1% for FY26, indicating managed demand trends and stable domestic conditions.
– Rupee Performance:
– The Indian rupee marked its strongest weekly performance in over three years, appreciating 1.4% this week despite closing 0.33% lower at 90.6550 against the U.S. dollar on Friday.
Sector Highlights
– Cigarette Manufacturers Surge:
– Shares of cigarette companies such as ITC, Godfrey Phillips, and VST Industries surged up to 13% following price hikes to offset increased taxes. This rally was further fueled by value buying after a sharp correction linked to tax revisions.
– Broader Market Trends:
– The Nifty Midcap and Smallcap 100 indices saw a minor decline, closing 0.2% and 0.3% lower, respectively, reflecting some cautious trading conditions.
Global Market Overview
– Overall Trends:
– Global markets faced a downturn, largely influenced by a selloff on Wall Street and heightened volatility impacting precious metals and cryptocurrencies. The MSCI All-Country World Index observed its worst weekly performance since mid-November, dipping about 1.6%.
– European and Asian Markets:
– The pan-European Stoxx 600 declined by 0.37%, and major sectors traded in negative territory. Conversely, Japan’s Nikkei 225 gained 0.8%, buoyed by upcoming elections.
Crude Oil Market
– Price Movement:
– U.S. crude futures faced losses, leading to the first weekly decline in several weeks, with Brent crude falling to $67.05 per barrel and West Texas Intermediate slipping to $62.77 per barrel.
Conclusion
In summary, the Indian markets exhibited resilience despite global headwinds, primarily due to the RBI’s policy decisions and the robust performance of the Indian rupee. As market participants remain cautious, the outlook will hinge on upcoming corporate performances and global economic cues. The strength of the Indian rupee and its best weekly gain in over three years could serve as a positive backdrop for domestic market sentiment moving forward.