Major global peers in Asia and Europe witnessed gains after data showed the US economy grew at the fastest pace in nearly two years in the July to September quarter even though interest rates remain high. Investors now await the US core inflation report later today which is expected to show a moderation in inflation.

According to a Reuters report, economists expect the US core personal consumption expenditure to decline to 3.7 per cent in September from 3.9 per cent a month earlier.

The domestic market has been under pressure in October because of sharp gains in the US bond yields, foreign capital outflow, unimpressive Q2 earnings and geopolitical tensions. Nifty 50 is down about 3 per cent in October so far. 

On Friday, Nifty 50 closed 190 points, or 1.01 per cent, higher at 19,047.25 while the Sensex closed at 63,782.80, up 635 points, or 1.01 per cent. Friday's gain in the market could be attributed to value buying after a recent correction in the market as concerns over interest rates, bond yields, Israel-Hamas war persist.

Also Read: S&P 500 is down 10% in 3 months; should Indian investors be worried?

According to Reuters, the 10-year US treasury yields rose 3 basis points (bps) to 4.845 per cent after scaling 5 per cent earlier in the week. The 10-year yield serves as a pivotal indicator for worldwide interest rates on borrowing. Since early August, this yield has seen a significant increase, rising from approximately 4 per cent. This surge can impact stock prices by altering the discount rate that investors employ to assess the future cash flows of companies.

Mid and smallcaps outperformed the benchmarks. The BSE Midcap index rose 1.70 per cent while the Smallcap index ended with a gain of 1.89 per cent.

The overall market capitalisation (mcap) of the firms listed on the BSE jumped to nearly ₹310.5 lakh crore from nearly ₹306 lakh crore in the previous session, making investors richer by about ₹4.5 lakh crore in a single session.

Over 100 stocks, including Maruti Suzuki India, Canara Bank, Persistent Systems and Shriram Finance, hit their fresh 52-week highs in intraday trade on BSE.

Meanwhile, crude oil prices jumped over 2 per cent after data showed the US economy remains strong. Brent Crude traded over 2 per cent higher near the $90 per barrel mark around 3:50 pm.

The rupee slipped by 2 paise to close at 83.25 per dollar, Bloomberg data showed. 

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Top Nifty 50 gainers today

Shares of Coal India (up 3.11 per cent), HCL Tech (up 2.90 per cent) and Axis Bank (up 2.87 per cent) ended as the top gainers in the Nifty 50 index.

Top Nifty 50 losers today

Only six stocks - UPL (down 0.40 per cent), ITC (down 0.10 per cent), Hindalco (down 0.05 per cent), BPCL (down 0.04 per cent), Asian Paints (down 0.04 per cent) and Dr. Reddy's Laboratories (down 0.04 per cent) - ended in the red in the Nifty 50 index.

Sectoral indices today

All sectoral indices ended with gains today with Nifty PSU Bank surging 4.11 per cent, followed by Nifty Media which rose 2.58 per cent and Nifty Realty which ended 1.95 per cent higher.

Nifty Bank rose 1.19 per cent and Nifty Private Bank index rose 1.09 per cent.

Expert views on markets

"The domestic market recovered well compared to yesterday’s sharp corrections, due to restrained FII’s selling along with moderation in currency and global bond yield volatility. To date, the Q2 results outcome is decent, which is in line with the buoyant estimate. Yet, the market is not enthusiastic as we are at the cusp of earnings downgrade in anticipation of further slowdown in the world economy due to elevated interest rates and geopolitical risk," said Vinod Nair, Head of Research at Geojit Financial Services.

Amol Athawale, Vice President - Technical Research at Kotak Securities observed that the markets were in an oversold zone after a six-session fall and investors were already anticipating a relief rally soon. Aided by a recovery in several Asian indices, domestic equities bounced back sharply on strong all-round buying support and Nifty once again retained the 19,000 mark.

However, lingering negative factors such as the Israel-Hamas conflict, surging US bond yield, FII fund outflows, and rate hike worries will mean markets are likely to stay volatile going ahead, Athawale said.

Technical views on Nifty 50

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas expects today's pullback to continue till 19,160 – 19,220 where resistance in the form of a Fibonacci retracement level and the 40-hour moving average is placed. The hourly momentum indicator has a positive crossover which is a buy signal. Considering these factors, the pullback may continue.

"On the weekly charts, we can observe that the Nifty has respected the support zone of 18,800 – 18,925 where multiple support parameters in the form of the 40-week average and a crucial Fibonacci retracement level were placed. Thus, going ahead the Nifty can consolidate within 18,800 – 19,200 before resuming the next leg of the fall. In terms of levels, 19,160 – 19,220 should act as a resistance while 18,930 – 18,900 should act as an immediate support zone," said Gedia.

Athawale underscored that on weekly charts the Nifty has formed a long bearish candle, indicating a strong possibility of further weakness from the current levels.

"As long as the Nifty is trading above 18,900, the pullback rally is likely to continue till 19,200-19,275. On the flip side, below 18,900, the selling pressure is likely to accelerate and the index could slip to 18,800. Further downside may drag the index to 18,700," said Athawale.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Updated: 27 Oct 2023, 04:33 PM IST