Market rebounds strongly, FMCG and IT sectors lead gains 

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The equity markets staged a remarkable recovery on Friday, with benchmark indices Sensex and Nifty closing significantly higher after a volatile trading session. The Sensex surged 843.16 points or 1.04 per cent to settle at 82,133.12, while the Nifty 50 closed 219.60 points or 0.89 per cent up at 24,768.30, marking its fourth consecutive week of positive closing.

V-shaped recovery

The day began with considerable uncertainty, as the markets opened lower and experienced intense selling pressure in the first hour, with the Nifty dropping nearly 360 points. However, the market demonstrated resilience, attracting buying interest near the 24,180 level and executing a remarkable V-shaped recovery of 600 points.

Sectoral performance revealed a mixed landscape, with FMCG, Infrastructure, and IT sectors emerging as notable performers. The Nifty FMCG index increased by 1.39 per cent, buoyed by easing domestic retail inflation and strategic price adjustments by companies in the sector.

Krishna Appala, Senior Research Analyst at Capitalmind Research, highlighted the broader market context, noting, “The recovery in broader markets continues, with mid-cap and small-cap indices only -3.6 per cent and -2.4 per cent below their previous highs.” He emphasised the critical role of government capital expenditure in driving economic momentum, particularly given the slowing consumption and subdued GDP growth.

Top gainers on the NSE included Bharti Airtel, which surged 4.44 per cent, alongside ITC (2.26 per cent), Kotak (2.05 per cent), HUL (1.97 per cent), and Ultratech (1.90 per cent). Conversely, Shriram Finance led the losers, declining 2.44 per cent, followed by Tata Steel (-1.31 per cent), IndusInd (-1.05 per cent), JSW Steel (-0.86 per cent), and Hindalco (-0.55 per cent).

An interesting development was noted in the stock of Astra Microwave Products, which jumped 6 per cent to ₹868 per share after announcing a ₹255.88 crore order from the Ministry of Defence for its joint venture, Astra Rafael Comsys Private Limited.

Vinod Nair, Head of Research at Geojit Financial Services, commented on market sentiments, “The domestic market smartly recovered from the day’s low… Currently, the market is anticipating a revival in consumer spending, driven by the festive season and year-end holidays.”

Macroeconomic indicators

Macroeconomic indicators also played a crucial role. November’s CPI inflation decelerated to 5.5 per cent from 6.2 per cent in October, while the Index of Industrial Production (IIP) growth improved marginally to 3.5 per cent in October from 3.1 per cent in September.

Technical analysts offered an optimistic outlook. Nagaraj Shetti from HDFC Securities noted, “Friday’s market action is signalling a strong comeback of bulls after a choppy movement… We expect more upside in the near term, with next upside targets around 25,200 levels.”

The Indian rupee also showed strength, ending 7 paise higher at 84.79 per dollar compared to Thursday’s close of 84.86.

As markets look ahead, investors are turning their attention to upcoming Q3 results and potential policy changes, including expectations of interest rate cuts and the implications of recent geopolitical developments.

The Volatility Index (VIX) decreased by 7.7 per cent for the week, settling at 13.05, indicating a reduction in market uncertainty and potentially setting the stage for further positive momentum in the coming weeks.