The latest surge was led by sensex heavyweight Reliance Industries that closed over 6% higher. Other top contributors to the index’s gain were HDFC Bank, ICICI Bank and HDFC, BSE data showed.
According to Motilal Oswal Financial Services head (retail research) Siddhartha Khemka, the day’s gains came on the back of several positive news reports that included the Chinese central bank’s decision to slash the five-year loan prime rate by 15 basis points (100bps = 1 percentage point) to 4.45% to stimulate economic activity. “Sentiments were also uplifted in domestic markets after positive commentary from finance minister (Nirmala Sitharaman) who said India’s economic growth is likely to be robust at 8.9% in the current financial year, reflecting the country’s strong resilience and speedy recovery.”
Friday’s rally added about Rs 5.8 lakh crore to investors’ wealth with the BSE’s market capitalisation now at Rs 258.1 lakh crore. The gain in the market came completely on the back of support from domestic institutions, according to data at the end of the day on the BSE. On Friday, net buying by domestic funds was at Rs 2,149 crore, while foreign funds were net sellers at Rs 1,265 crore.
Despite the strong rally on Dalal Street on Friday to end a highly volatile week, the stock price of life insurance major LIC continued to slide. After touching a life-low at Rs 825 on the BSE, the stock closed at Rs 826 — down 13% from its IPO price of Rs 949.
Market players expect the volatility to continue in the coming week. According to Samco Securities head (equity research) Yesha Shah, the volatility seen during the week is expected to continue, considering major economic data releases, the current earnings season and the expiry of May contracts. The minutes of the last meeting of the US Fed, US GDP growth rate forecasts, and initial jobless claims will all influence global market sentiment.Meanwhile, the S&P 500 slipped as much as 2% on Friday, pushing it 20% below its record closing high on January 3, entering bear territory.
“Back home, the data on India’s foreign exchange reserves, which was in the headlines for falling to a one-year low, as well as the movement (of the rupee) will be keenly monitored. Markets will continue to remain bumpy and investors should remain on the side lines until a clear trend emerges,” Shah wrote in a note.