Sensex and Nifty erased sharp losses, backed by recovery in European indices and closed Friday's volatile session at day's high. Reversing from yesterday's losses, BSE Sensex ended 242 points higher at 33,780 and NSE Nifty closed 70 points higher at 9,972. Sensex and Nifty have overall fallen 1.48% and 1.67% each in this week's trade.
Earlier, domestic markets traded sharply lower led by weakness in Asian counterparts as poor US economic outlook and fear of a new wave of coronavirus pandemic led to the plunge in Wall Street. Following bearish trend from overseas, Sensex opened 1,100 points lower at 32,434 and Nifty was down 215 points at 9,902.
Commenting on the reverse trend, Vinod Nair, Head of Research at Geojit Financial Services said, "Markets tracked the positive opening in the European markets, post the sell-off seen yesterday. Except for IT, which was impacted by H-1B visa news, all the other sectors traded positive."
As per forex traders, growing concerns about the resurgence in COVID-19 infections in domestic grounds and overseas kept currency investors cautious. Globally, the number of cases linked to the disease has crossed 75 lakh and the death toll has topped 4.21 lakh. In India, the death toll due to COVID-19 rose to 8,498 and the number of infections rose to 2.97 lakh.
Asian markets were trading lower in the early trade, while US markets saw its worst closing since March falling more than 7% on signs of re-emergence of covid cases.
Ajit Mishra, VP - Research, Religare Broking said, "Weakness in global markets led to a feeble start but gradual recovery in index majors not only helped the benchmark to recoup losses but also close around the day's high. It all started with the US Fed statement that the US economy would take longer than expected to recover which impacted the sentiments world over. However, the recovery in the market shows that participants are still buoyant on the growth prospects."
Massive global sell-off, foreign fund outflows and rising coronavirus cases worldwide continued to hit domestic investor sentiment. On a net basis, FIIs sold Rs 805 crore in equities, while DIIs offloaded Rs 874 crore in equities on Thursday's session
Market participants are also keenly awaiting Consumer Price Index (CPI) and Index of Industrial Production (IIP) data scheduled to be released later in the day for further cues.
Meanwhile, companies set to announce their earnings are Eicher Motors, Hindalco, Goodyear, Castrol India, IOL Chemicals & Pharmaceutical, Geojit Financial Services among others.
On the currency front, Rupee ended lower at 75.84 per dollar as compared to its last close of 75.79 against the US dollar on Thursday. Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said, "It looks like the RBI is keen to maintain the rupee in a 75.50 to 76.00 band, and that should give rupee bulls some breather. We expect the rupee to trade in the 74.80 to 76.60 band in the near term."
On technical indicators, HDFC Securities suggested that 9707 followed by 9598 could be the next supports while 9944-10021 could be the next resistance for the Nifty in the near term.
Commenting over the market outllok for the next week, Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote said,"The important number to watch out for going ahead is India VIX which is currently at 30-32 levels. In the weeks to come, markets are likely to remain under pressure and VIX is likely to rise which will determine the speed of the market movement. However, US VIX is currently at much higher levels of 40-41 which implies that fear factor is again rising for the US markets after a terrific come back. Results from major PSU banks are awaited but they are also expected to somber the mood of the markets."