Sensex, Nifty extend gains; Rs 5.8 lakh crore investor wealth added; what's ahead?

Indian equity benchmarks extended their gains for a second consecutive session on Friday, led by buying in IT, realty and metal stocks. The 30-share BSE Sensex pack surged 827.57 points or 1.08 per cent to settle at 77,569.39, while the NSE Nifty50 index gained 244.10 points or 1.02 per cent to end at 24,206.90.

Among the top contributors to the Sensex's gains were Reliance Industries Ltd (RIL), ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd, Infosys Ltd, State Bank of India (SBI), Bajaj Finance, Mahindra & Mahindra (M&M) and Bharat Electronics Ltd (BEL).

The rally added around Rs 5.80 lakh crore to investor wealth, with the combined market capitalisation (m-cap) of BSE-listed companies rising to Rs 481.75 lakh crore from Rs 475.94 lakh crore in the previous session.

The broader market continued to outperform the benchmark indices, with Nifty Midcap 100 and Nifty Smallcap 100 advancing 1.40 per cent and 1.55 per cent, respectively.

Vinod Nair, Head of Research at Geojit Investments, said Indian equities witnessed a volatile week as early optimism gave way to risk aversion after escalating tensions in West Asia pushed crude oil prices higher. However, the sell-off proved short-lived as encouraging Q1 business updates from the banking and IT sectors improved sentiment ahead of the earnings season, helping the market stage a broad-based recovery towards the end of the week.

He noted that while large-cap stocks ended the week lower, the mid- and small-cap segments outperformed, supported by gains in realty, consumer durables and metal stocks.

Looking ahead, Nair said investors will closely monitor Q1 FY27 earnings, India's retail inflation print, US core inflation data and commentary from Federal Reserve officials.

He added that easing inflationary pressures and slowing growth across the US, Europe and China have strengthened expectations of a more accommodative monetary policy stance despite the recent hawkish FOMC commentary. According to Nair, easing geopolitical tensions and further moderation in crude oil prices could provide an additional boost to sentiment, while sustained earnings outperformance in Q1 FY27 may reinforce confidence in the corporate earnings outlook and help catalyse a recovery in FII inflows.

Ajit Mishra, SVP (Research) at Religare Broking, said the market's positive undertone was primarily driven by a steady start to the Q1 earnings season, with Tata Consultancy Services' (TCS') in-line results offering relief to investors. Continued softness in crude oil prices and stability in the rupee further supported sentiment, although participants remained watchful of geopolitical developments and global market performance.

On the technical front, Mishra said a sustained move above 24,150 could pave the way for Nifty50 to extend its gains towards the 24,400-24,600 zone. On the downside, he expects immediate support at 24,000, followed by 23,800. Mishra continued to advocate a stock-specific, buy-on-dips strategy, favouring relatively stronger sectors such as banking, pharma and realty.