Sensex Rises 200 Points, But Ends Well Off Day's Highs

Indian equity benchmarks rose on Friday, extending their winning streak for the second straight session. However, they ended well off their day's highs as conflicting global sentiment broadly hurt risk assets, with world stocks tumbling on poor corporate earnings reports.

While expectations that major central banks were on the verge of easing their rhetoric of aggressive rate hikes boosted risk appetite, the dimming outlook for China and the wider global economy, disappointing results from tech giants soured sentiment and marred a tentative recovery in equities.

The 30-share BSE Sensex index rose 203.01 points, or 0.34 per cent, to close at 59,959.85, and the broader NSE Nifty-50 index gained 49.85 points, or 0.28 per cent, to end at17,786.80, but both benchmarks gave up some of their sharp gains from earlier in the session.

The Sensex rose to a high of 60,133.17 points during the session, and the Nifty had jumped to a high of 17,838.90, before giving up some of those gains. Still, both benchmarks have extended their winning streak to the second straight day.

Major winners in the Sensex pack included Mahindra & Mahindra, Reliance Industries, NTPC, Power Grid, Titan, Bajaj Finserv, and Kotak Mahindra Bank.

Maruti Suzuki's stock rose almost 5 per cent after the business reported that consolidated net profit more than doubled to Rs 2,112.5 crore on the strength of record sales.

Tech Mahindra, Tata Steel, Sun Pharma, ICICI Bank, and the State Bank of India were the laggards.

Indian stock markets were closed on Monday for regular trading and were open for an hour - called the Muhurat Trading session, and were shut gain on Wednesday for Diwali celebrations.

On Monday, equity benchmarks posted significant gains, reaching one-month highs during the Muhurat trading hour to commemorate the start of the Hindu Samvat year 2079.

Barring a fall on Tuesday, which stalled a seven-day rally in Indian stocks, appeal for domestic equities has been positive in a holiday-shortened week.

Still, as investors struggled with mixed earnings reports and looked to next week's Federal Reserve meeting for cues on whether a change in the pace of rate hikes was on the table, Asian shares were poised to end a three-day winning streak on Friday.

The MSCI index of Asian stocks outside of Japan fell over 1.5 per cent to about 433 points but held above its two-and-a-half-year low on Monday. Still, the index is down about a third this year.

European and US futures indicated stocks were set to fall as disappointing earnings reports have added to the gloom.

In an otherwise bleak year, resilient corporate profits have been one positive, but recent disappointing numbers are hurting investor sentiment.

"The concern is becoming increasingly related to earnings," Frank Benzimra, Head of Asia Equity Strategy at Societe Generale, told Reuters, adding that interest rate hikes remain part of the worry.
"It is the earnings and the risk of a recession which is hurting the market."