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Published: Apr 1, 2023
Updated: Apr 1, 2023

Indian Stock Markets Experience Bullish Run on Friday as Global Banking Fears Ease

The Indian stock markets surged on Friday,continuing their upward trajectory for a third consecutive day, as investors' risk appetite improved following the easing of global banking crisis fears. The S&P BSE Sensex reached a high of 59,068 before ending the day with a gain of 1,031 points at 58,992, with the NSE Nifty 50 also hitting a high of 17,382 and settling at 17,360, up by 279 points. While the broader markets also exhibited strength, analysts remain cautious about the sustainability of this rebound due to the slew of data- driven activity that markets will face in the coming days.

Factors Behind Friday's Market Run

● Morgan Stanley Upgrades India: The global brokerage firm, Morgan Stanley, upgraded India to 'equal-weight' from 'neutral' due to the resilient economy and narrowing valuation premiums. While analysts remain 'overweight' on North Asia excluding Japan, they remain 'underweight' on ASEAN countries.

● Strong Global Cues: The US markets extended their winning streak for the second straight day, diluting concerns over the banking crisis, and triggering renewed buying across technology names. Tracking these positive moves, Asia-Pacific markets also closed higher.

● RIL Leaps Ahead: Shares of index-heavyweight Reliance Industries rallied over 4 per cent to Rs 2,333 per share in Friday's intra-day trade, after the conglomerate said that it would meet on May 2, 2023, to mull demerger of its financial services unit. According to the plan, RIL's shareholders would receive shares in the demerged entity for each one held in the company.

● Turnaround in FII Flows: FIIs have turned in favour of Indian markets on the back of attractive valuations, with equities worth Rs 2,776.5 crore bought in the past two days alone.

● Rupee Strengthens: The rupee appreciated 24 paise to 82.1 in Friday's early trade, following strong global cues and foreign inflows.

● Technical Factors: Charts suggest that the NSE Nifty index is undergoing time-wise correction, with the benchmark index expected to hit the 17,500-mark after lingering in 'oversold' territory.

RBI's interest rate hike decision next week to create uncertainty next week

The recent rebound in Indian markets is encouraging for investors, however, caution is advised as there is a lot of data-driven activity in the pipeline that could trigger significant stock price movements. With the RBI's decision on interest rates due on April 6, January- March results season starting from April 13, and auto sales numbers on April 1, investors should be prepared for volatility. Nonetheless, analysts remain positive about the Indian economy and the stock markets, with Morgan Stanley's upgrade and FIIs' renewed interest in Indian equities being positive signs for the future.