Markets maintain momentum for 3rd day; log weekly gains

”The present rally is driven partly by expectations that given the steady decline in commodity prices, inflation will start showing a declining trend enabling central banks to go a bit slow on hiking rates, and partly by short covering,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

On a weekly basis, the Sensex advanced 1,573.91 points or 2.97 per cent, while the Nifty climbed 468.55 points or 2.97 per cent. ”The higher probability of a global slowdown caused by high inflation and higher rates has been talked about more in the last couple of weeks. But the recent fall in the prices in commodities, especially oil, and the expectation that central banks may go slow on the interest rate hike, have brought back some confidence in the mind of the investors.

”The rise in the equity markets witnessed in the last few trading sessions of this week was based on this outlook of probable moderation in inflation, and therefore of rates. However, the actual inflation numbers will be released in the US and India in the coming week, and this would be crucial in deciding the trajectory of the markets,” said Joseph Thomas, Head of Research, Emkay Wealth Management.

In the broader market, the BSE smallcap gauge went higher by 0.28 per cent and midcap index climbed 0.20 per cent. Among BSE sectoral indices, capital goods jumped 2.23 per cent, followed by power (1.71 per cent), utilities (1.58 per cent), industrials (1.51 per cent), bank (0.66 per cent) and FMCG (0.54 per cent).

Metal, basic materials and telecom were the laggards. Metal, basic materials and telecom were the laggards. Global equities were mixed as investors awaited key jobs data from the US, which will offer clues on the Federal Reserve’s rate hike trajectory.

In Asia, markets in Tokyo, Hong Kong and Seoul ended higher, while Shanghai settled marginally lower. Bourses in Europe were trading lower in mid-session deals.

The US markets had ended higher on Thursday. Meanwhile, international oil benchmark Brent crude dipped 0.12 per cent to USD 104.5 per barrel. Meanwhile, international oil benchmark Brent crude dipped 0.12 per cent to USD 104.5 per barrel.

The rupee declined by 10 paise to close at 79.23 (provisional) against the US dollar on Friday, tracking the strength of the American currency in the overseas market. Foreign institutional investors remained net sellers on Thursday, offloading shares worth Rs 925.22 crore, as per exchange data.