The Sensex soared 689.19 points or 1.4% to a record close of 48,782.51 after touching a lifetime high of 48,854.34 earlier in the day. The Nifty ended up 209.90 points or 1.48% at a record of 14,347.25 after hitting an all-time intraday high of 14,367.30. The midcap index too hit a record, extending its recent bull run. With these gains, stock indices have completed their longest stretch of weekly gains since 2009. The expectation of more stimulus and vaccine-related optimism has kept markets going higher.
MSCI said it would drop three Chinese telecom giants from various equity benchmark indices on Friday in response to a US executive order restricting investor ownership of companies with alleged ties to the military.
“This deletion resulted into reallocation and realignment of funds to other emerging markets like India,” said Sriram Velayudhan, vice president, IIFL Alternative Research. “The anticipated inflows were to the tune of $400-450 million odd, which led to a higher FPI (foreign portfolio investor) inflow figures on Friday.”
FPIs bought shares worth Rs 6,029.80 crore on Friday while domestic institutional investors (DIIs) sold shares worth 2,372.50 crore, provisional data showed. RIL got the most inflows of $44.5 million, according to a note from Edelweiss.
Avenue Supermarts, Adani Green Energy, Hindustan Unilever, Infosys, HDFC and TCS each saw purchases of $3 million to $32 million on Friday.
Maruti Suzuki India ended as the top gainer on the Sensex with a surge of 6%. Tata Consultancy Services (TCS) ended up nearly 3%, ahead of its December quarter earnings that were announced after market hours on Friday. Infosys and Wipro are due to report results next week.
Brokerage Ambit Capital said the next 30 days will be crucial as corporates declare third-quarter results, the government presents its FY22 budget on February 1 and the Reserve Bank of India (RBI) monetary policy committee meets in the first week of next month.
“With the policy environment in India likely to stay neutral (i.e. no material increases in policy support being on the anvil) and with revenue growth prospects for India Inc remaining uncertain, we would urge investors to keep adding stocks that offer strong revenue growth prospects over the next five years,” said Ambit’s Nitin Bhasin and Ritika Mankar in a client note.
Analysts are recommending investors stay put as the Nifty is expected to cross 14,400, which was considered a crucial hurdle.
“The ceiling has moved up to 14,600-14,700. The support would be around 14,100,” said Rohit Srivastava, founder, Indiacharts.com. “We advise staying long on the market ahead of the budget.”