Sensex, Nifty slip from intraday highs but settle higher; what's weighing on the market?

Indian equity benchmarks came off their intraday high levels on Friday, even as they settled on a higher note, amid a volatile trading session marked by mixed sectoral trends and lingering macro concerns.

The 30-share BSE Sensex pack climbed 325.72 points or 0.44 per cent to close at 74,532.96, while the NSE Nifty index rose 112.35 points or 0.49 per cent to settle at 23,114.50.

The upside in headline indices was largely supported by gains in heavyweight stocks such as Reliance Industries Ltd (RIL), Infosys Ltd, Tata Steel Ltd, Bharti Airtel Ltd, State Bank of India (SBI), Sun Pharmaceutical Industries Ltd, Tata Consultancy Services Ltd (TCS), NTPC Ltd, Titan Company Ltd and Tech Mahindra Ltd.

Volatility persists

Ajit Mishra – SVP, Research, Religare Broking Ltd, said, "The market witnessed a volatile session and ended higher, taking a breather after the previous session's steep decline. Nifty50 opened on a firm note following positive global signals and maintained gains in the early hours. However, selling pressure resumed as the session progressed, leading the index to surrender most of its gains by the close. Despite this, it managed to end with modest gains of nearly half a per cent."

He added, "Sectoral participation remained mixed, reflecting selective buying interest. Pharma, IT and metal stocks were among the key gainers, while realty, financials and banking traded subdued. Broader indices traded mixed, with midcap gaining over half a per cent and smallcap ending flat."

Risks remain

Mishra further stated, "The sharp decline in the previous session also triggered some bargain hunting across sectors. However, lingering geopolitical tensions, continued weakness in the rupee and persistent FII outflows remain key overhangs for the market."

Kranthi Bathini, Equity Strategist at WealthMills Securities, said domestic indices regained some momentum after a sharp sell-off in the previous session. He added that the day's uptick was a "dead cat bounce", driven by some bottom fishing and short covering.

Rupee weakness

Vinay Rajani, Senior Technical Research Analyst at HDFC Securities, noted, "The Indian rupee resumed its decline to fresh record lows after Thursday's holiday, pressured by persistent foreign fund outflows and surging crude oil prices."