Markets Extend Winning Streak for Third Session as Rate-Cut Hopes Lift Sentiment; Nifty Ends Above 24,270
Our Business Correspondent
Indian equity benchmarks closed higher for the third consecutive trading session on Friday, buoyed by positive global cues and growing optimism that the US Federal Reserve could begin easing monetary policy sooner than expected after weaker-than-anticipated US employment data. Strong buying in information technology, banking, healthcare and select metal stocks helped benchmark indices finish in positive territory, although profit-booking during the latter half of the session erased a part of the day’s gains.
The BSE Sensex rose 261.79 points (0.34%) to settle at 77,763.91, while the Nifty 50 advanced 95.15 points (0.39%) to close at 24,270.85, its highest closing level in several sessions. Over the past three trading days, the Sensex has gained 1.68%, while the Nifty has rallied 1.69%, reflecting sustained investor confidence despite lingering global uncertainties.
Market participants said expectations of lower US interest rates, easing volatility and continued resilience in India’s domestic economy supported buying interest across frontline stocks.
Fed Rate-Cut Expectations Boost Global Sentiment
Investor sentiment improved after the latest US labour market data showed the world’s largest economy added only 57,000 jobs in June, significantly below market expectations of around 110,000 and sharply lower than the revised 129,000 jobs recorded in May.
The weaker payroll data reinforced expectations that the US Federal Reserve may cut interest rates at its upcoming policy meeting to support economic growth. Lower US interest rates generally improve liquidity conditions, making emerging markets such as India more attractive for foreign investors.
Although Wall Street delivered a mixed performance overnight, the prospect of monetary easing encouraged buying across Asian and European markets, providing a supportive backdrop for Indian equities.
Banking and IT Stocks Lead Rally
The day’s gains were largely driven by heavyweight banking and technology stocks.
Bharti Airtel rose 1.81%, emerging as one of the biggest contributors to the Nifty’s advance. ICICI Bank gained 0.91%, while HDFC Bank added 0.70%, providing stability to benchmark indices.
Technology shares also remained in demand after Thursday’s sharp recovery, with investors continuing to accumulate quality IT stocks amid expectations that lower global interest rates could revive technology spending in developed markets.
Broader Markets Underperform
Unlike the benchmark indices, broader markets witnessed a relatively subdued performance.
The BSE MidCap Index declined 0.25%, while the BSE SmallCap Index managed to edge up only 0.09%, indicating selective buying outside the large-cap segment.
Market breadth, however, remained positive. On the Bombay Stock Exchange, 2,257 stocks advanced, 1,986 declined, while 202 remained unchanged, suggesting buying interest remained fairly broad-based despite the modest movement in broader indices.
Meanwhile, the India VIX, considered the market’s fear gauge, declined another 3.98% to 11.80, its lowest level in recent weeks, reflecting reduced expectations of near-term volatility.
Services Sector Growth Slows
Fresh macroeconomic data indicated that India’s services sector continued expanding in June, although growth moderated amid softer domestic demand.
According to the latest HSBC India Services Purchasing Managers’ Index (PMI), the Business Activity Index eased to 57.4 in June from 59.8 in May, marking the slowest pace of expansion in 17 months. However, the index remained comfortably above the 50-point threshold that separates expansion from contraction.
The survey showed hiring activity remained largely stagnant, business confidence weakened and input cost pressures eased. At the same time, export demand improved, with new overseas orders recording their strongest growth in three months.
Economists said while domestic demand showed signs of moderation, India’s services sector continues to demonstrate resilience supported by strong international demand.
Currency, Bond and Commodity Markets
In the fixed-income market, the yield on India’s benchmark 10-year government bond edged up slightly to 6.716% from 6.713% in the previous session.
The Indian rupee strengthened modestly against the US dollar, trading around 95.18 compared with 95.35 in the previous session, supported by weakness in the dollar index.
The US Dollar Index (DXY) slipped 0.13% to 100.48, reflecting expectations of lower US interest rates.
Gold prices rallied sharply as investors increased allocations to safe-haven assets. MCX Gold futures for August delivery rose 1.43% to Rs 1,47,850 per 10 grams.
Meanwhile, Brent crude remained largely stable, inching up 0.07% to $71.85 per barrel, with traders balancing expectations of steady demand against geopolitical developments.
Asian Markets Advance
Asian equities ended mostly higher as investors welcomed expectations of easier monetary policy in the United States.
Japan’s services sector returned to growth in June. The S&P Global Japan Services PMI rose to 52.2 from 50.0 in May, although business confidence remained cautious due to geopolitical tensions and rising costs.
China’s services activity also remained in expansion territory. The Caixin China General Services PMI eased slightly to 54.1 from 54.4, indicating continued growth despite softer domestic demand. Export orders, however, expanded at their fastest pace in nearly two years.
European markets also traded higher, while US markets remained closed on Friday for the Independence Day holiday.
Corporate Developments
Several company-specific developments influenced trading during the session.
Shares of HCL Technologies jumped 5.74% after the company announced a major agreement with a Europe-based Fortune Global 50 enterprise to modernise its global digital workplace and enterprise network using artificial intelligence.
Sumitomo Chemical India surged 13.55% after its Japanese parent announced a joint venture with Samsung Electro-Mechanics to enter the advanced semiconductor glass substrate business.
Bajaj Finance gained 1.28% after reporting a 20% year-on-year increase in new loan bookings during the first quarter of FY27 to 1.61 crore loans.
Engineering services provider Bluspring Enterprises rose nearly 4% after its subsidiary secured a Rs 1,437 crore operations and maintenance contract from Vedanta Aluminium for a captive power plant.
Healthcare major Zydus Lifesciences climbed 3.92% after signing a memorandum of understanding with Apollo Hospitals to introduce the Shield Multi-Cancer Detection test in India, strengthening its presence in preventive healthcare diagnostics.
Real estate developer Marathon Nextgen Realty advanced 2.77% after announcing a redevelopment project in Mumbai’s Versova locality through its subsidiary.
Jewellery retailer PC Jeweller gained over 4% after reporting an estimated 21% increase in consolidated quarterly revenue.
Financial Stocks Witness Mixed Trend
Among financial stocks, Union Bank of India declined 3.70% after its provisional business update showed sequential declines in deposits and CASA balances despite healthy loan growth.
The bank’s gross advances increased 12.5% year-on-year to Rs 10.96 lakh crore, while deposits rose 3.5% compared with a year earlier but declined sequentially.
Mahindra & Mahindra Financial Services also came under pressure, falling 5.39%, despite reporting approximately 21% year-on-year growth in loan disbursements. Analysts attributed the decline largely to profit booking after recent gains.
Meanwhile, PB Fintech, the parent company of Policybazaar, fell 5.71% following reports of a large block deal. Media reports indicated that investor Macritchie Investments planned to sell around 2.6% of its stake through block transactions valued at nearly Rs 1,909 crore, prompting selling pressure in the stock.
IPO Market Remains Robust
Primary market activity continued to attract strong investor participation.
The Knack Packaging initial public offering (IPO) received an overwhelming response, with bids for over 157.67 crore shares against 1.89 crore shares available, translating into a subscription of 83.14 times by the close of bidding on Friday.
The strong demand underscores continuing investor appetite for quality public issues despite elevated valuations in the secondary market.
Outlook
Market analysts believe investor sentiment is likely to remain positive in the near term as expectations of a US Federal Reserve rate cut strengthen and volatility continues to ease.
Attention will now shift to upcoming corporate earnings for the April-June quarter, foreign institutional investment flows, domestic macroeconomic indicators and global central bank commentary.
While profit booking may continue at higher levels following the recent rally, improving global liquidity expectations, resilient domestic fundamentals and sustained interest in quality large-cap stocks are expected to provide support to Indian equities in the coming weeks.
Disclaimer: This report is intended for informational and journalistic purposes only and should not be construed as investment advice, a recommendation to buy or sell securities, or a forecast of future market performance. Investors should consult certified financial advisers before making investment decisions.