Despite currency pressure, the market’s ability to absorb global shocks and sustain interest from domestic investors continues to provide underlying support.
BIZ DESK
Domestic Equity benchmarks ended Friday’s session on a strong note, with the Nifty reclaiming the psychologically key 26,000 mark, supported by a broad-based risk-on sentiment after the U.S. Federal Reserve delivered a 25 bps rate cut. The Nifty closed at 26,046.95, up 148.40 points (0.57%), while the Sensex jumped 449.53 points (0.53%) to end at 85,267.66.
The rally came even as the Indian rupee slid to fresh all-time lows versus the U.S. dollar, pressured by persistent foreign institutional investor (FII) outflows and rising demand for safe-haven assets globally. However, expectations of improved global liquidity, accommodative monetary stances by major central banks, and continued domestic retail participation helped offset currency concerns.
“Global risk appetite improved after the US Fed rate cut, boosting liquidity optimism and lifting domestic equities despite the rupee hitting record lows and continued FII outflows,” said Vinod Nair, Head of Research, Geojit Financial Services. “Auto, Metals, Consumer Durables, and Realty led gains, while FMCG and PSU Banks underperformed.”
Sector-Wise Performance Snapshot
Top Gainers
1. Metals
- Led the rally on expectations of improved global demand, particularly from China following signs of policy easing.
- Higher commodity prices and a weaker rupee (boosting export realizations) added momentum.
- Major metal stocks gained between 2–4%, helping the Nifty Metal index outperform broader indices.
2. Auto
- Benefited from lower global interest rate expectations, aiding financing conditions.
- Festive-season demand indicators remained robust.
- EV-linked segments also saw buying interest.
3. Consumer Durables
- Strong discretionary demand trends and easing input cost pressures supported the sector.
- Investors rotated into consumption-linked names amid optimism about rural recovery.
4. Realty
- Lower rate expectations boosted real estate sentiment, with developers seeing renewed traction.
- Pre-festive launch pipeline and sustained housing demand acted as catalysts.
Laggards / Underperformers
1. FMCG
- Sector faced pressure from valuation concerns and slower volume recovery, especially in rural markets.
- Defensive sectors saw profit-taking as markets shifted into high-beta pockets.
2. PSU Banks
- Sentiment weakened due to concerns over:
- Rising global yields despite the Fed cut,
- The rupee’s volatility,
- Continued FII selling in the financial space.
- Investors preferred private banks over their PSU counterparts.
Broader Market Perspective
- Midcap and smallcap indices also participated in the rally, indicating strong market breadth.
- Volatility cooled, reflecting improving global sentiment.
- Analysts expect near-term market movement to remain sensitive to:
- Rupee trajectory,
- US economic data,
- Commentary from major global central banks,
- FII flow trends.
Despite currency pressure, the market’s ability to absorb global shocks and sustain interest from domestic investors continues to provide underlying support.