Benchmark indices opened marginally higher on Friday, extending their winning streak to six sessions, though gains remained modest as investors weighed hopes of a US-India trade deal against rising crude oil prices and renewed foreign institutional investor selling.
The opened at 25,935.10 and was trading at 25,910.40 at 9:40 am, up 19 points or 0.07 per cent from its previous close of 25,891.40. The opened at 84,667.23 and was trading at 84,584.24, gaining 27.84 points or 0.03 per cent from its previous close of 84,556.40.
“The market rally which began strongly yesterday on news of an imminent trade deal between India and US, lost steam mid-way and completely fizzled out during the last hour,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd. “The positive news regarding the trade deal was not confirmed by the Indian side. This dampened the spirits of the bulls, who couldn’t force further short-covering.”
However, Vijayakumar noted that the Commerce Minister said “we hope to work towards a fair and equitable agreement with the US”, suggesting the ongoing rally is likely to remain intact.
Market sentiment received a boost from easing trade tensions between the US and China, with confirmation of a planned meeting between US President Donald Trump and Chinese President Xi Jinping next week, rekindling hopes of progress on trade talks. “The US doesn’t have a strong bargaining power with China, which has huge leverage in rare earth minerals and magnets,” Vijayakumar added. “This will force the US to climb down from its unrealistic tough tariff stance.”
However, a sharp 5 per cent spike in global crude oil prices following fresh US sanctions on Russian oil majors tempered optimism. WTI crude surged above $61 per barrel, nearing a two-week high. “The sanctions against Rosneft and Lukoil, which together represent nearly half of Russia’s oil exports, prompted Chinese state-owned companies to suspend seaborne purchases and led Indian refiners to cut imports,” said Rahul Kalantri, VP Commodities at Mehta Equities.
“The sanctions are expected to force India to scale back purchases of discounted Russian crude and turn to costlier alternatives, raising concerns over a higher import bill and renewed inflationary pressures,” said Ponmudi R, CEO of Enrich Money.
On the institutional front, foreign institutional investors turned net sellers, offloading equities worth ₹1,165 crore on October 23, while domestic institutional investors provided strong support, purchasing equities worth ₹3,893 crore on the same day.
Among sectoral gainers, metals led the rally with surging 3.91 per cent to ₹823.35, while gained 0.92 per cent to ₹175.77. Financial stocks also advanced, with rising 1.15 per cent to ₹717.80 and gaining 0.84 per cent to ₹1,375.20. Energy stocks participated in the rally, with up 0.88 per cent at ₹254.53.
Fast-moving consumer goods and pharmaceutical stocks bore the brunt of selling pressure. declined 3.64 per cent to ₹2,507.00, while fell 2.42 per cent to ₹1,605.30. Banking stocks showed mixed performance, with dropping 1.64 per cent to ₹2,189.00. Transport and logistics stocks also weakened, with Adani Ports down 0.63 per cent at ₹1,443.90 and IndiGo declining 0.62 per cent to ₹5,753.00.
“Sentiment may get a lift from hopes of US tariff cuts on Indian imports to 15-16 per cent, though the upside could remain capped amid three negatives — oil prices spiking to $61.50 after US sanctions on Russian oil majors, renewed US-China trade tensions, and FIIs turning net sellers,” said Prashanth Tapse, Senior VP Research at Mehta Equities.
Technically, the Nifty 50 continued to display strength with gains across sectors, though indicators suggest the index is overheating in the short term. “Sustaining above the crucial 26,000 mark could trigger another leg of buying, propelling the index toward 26,280-26,300,” Ponmudi said.