The Indian stock market opened higher on Friday, snapping its three-day losing streak, led by gains in IT stocks
The Sensex opened 416.25 points, or 0.57%, higher at 73,665.64, while the Nifty 50 opened up 54.55 points, or 0.24%, at 22,742.20. The Bank Nifty index opened at 54,965.75, higher by 40.05 points, or 0.07%.
Broader markets underperformed, as the Nifty Smallcap 100 and the Nifty Midcap 100 indices traded 1% lower each.
Among sectors, Nifty IT index was the only one to trade in the green. Losses were seen in Nifty Metals, Nifty Realty, Nifty Auto, Nifty Pharma and Nifty PSU Bank indices.
In the currency market, the Indian rupee opened 3 paise higher at 94.79 against the US dollar as compared to its Thursday's close of 94.82 level.
On the global front, Asian markets fell, while the US stock market ended mostly lower on concerns over AI spending and elevated crude oil prices.
Sentiment remains cautious over elevated crude oil prices and weakness in global markets.
Crude oil prices spiked, with the brent oil trading near $114 a barrel, which is a major negative for the Indian economy and markets. Investors will also focus on the corporate earnings for the September quarter.
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Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments believes there are also certain positives in the market that can restrain FII selling significantly, including the sharp decline in the US 10-year yield to 4.96% and the appreciation in the rupee to 94.70 to the dollar.
"More importantly, more than Rs 3 lakh crore of the IPO money (out of the Rs 3.73 crore that has gone into the Jio Platform IPO during the last two days) will come back into the system after the allotment is completed by next Monday. This potential liquidity surge can lift the market next week," said Vijayakumar.
The market can move higher anticipating this in advance, he noted, saying that the rally, if it happens, will be led by the large-caps which are signalling resilience.
“The sharp correction in the broader market, particularly in small-caps, might continue since their valuations, driven up by liquidity rather than fundamentals, are hard to justify. Fairly-valued large-caps, particularly those which are growing well, present value buying opportunities for patient investors,” Vijayakumar added.
Technically, Nifty 50 formed a Doji candle on the daily chart on Thursday, signalling indecision after a volatile session.
“A move above yesterday's high of 22,785 could indicate a short-term trend reversal and open the door for a recovery toward 23,175, the next key resistance. On the downside, 22,500 remains the immediate support,” said Nandish Shah - Deputy Vice President, HDFC Securities.
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