Equity benchmarks post recovery; Nifty and Sensex gain nearly 2% amid FII buying, easing bond yields

Mumbai: The Indian equity benchmarks posted firm recovery of nearly 2 per cent this week amid renewed buying from foreign institutional investors (FIIs), easing bond yields and favourable domestic earnings results.

Nifty added 2 per cent during the week and gained 0.51 per cent on the last trading day to reach 23,053. At close, Sensex was up 308 points, or 0.42 per cent, at 74,459. It gained 1.83 per cent during the week.

"Indian equities closed the week higher as softer crude oil prices and easing bond yields revived risk appetite. While the Fed, ECB and BoJ kept rates unchanged as expected, their continued caution on inflation kept hopes of early monetary easing in check," an analyst said.

Improving macro conditions encouraged broader participation, with mid- and small-caps outperforming large-caps. The mood turned cautious towards the weekend as renewed West Asia tensions pushed crude higher, triggering profit booking in the broader market, though benchmarks preserved their weekly gains.

Pharma and healthcare stocks led the week's gains on the back of positive earnings, while real estate stocks benefited from softer bond yields. Metals, FMCG and autos benefited from expectations of easing input costs, while cement and oil & gas remained the key laggards.

Foreign institutional investors (FIIs) net bought Rs 6,304.67 crore worth of shares during the week, while domestic institutional investors (DIIs) bought shares worth net Rs 3,109.79 crore.

Broad market indices outperformed benchmark indices, as Nifty Midcap100 added 2.69 per cent and Nifty Smallcap100 advanced 4 per cent during the week.

Brent crude ended the week near $117 a barrel, and the upcoming OPEC+ review will be closely watched for signals of a potential supply response.

Domestically, manufacturing and services PMI readings will help gauge whether business activity can sustain its momentum amid elevated energy costs and tighter financial conditions.

Investors are keen on US PMI, job data and US midterm election outcomes as key factors shaping global risk appetite, while domestic PMI and Q2 earnings will steer stock-specific moves.

Immediate resistance of Nifty is placed in the 23,175–23,285 range, and support is seen at 22,750–22,800. Bank Nifty needs to close above 55,150 to reinforce the bullish outlook, an analyst said, adding that 53,780 remains its crucial support, said analysts.