New Delhi: Indian equity benchmarks Sensex and Nifty staged a modest recovery in early trade on Friday, snapping a three-session losing streak, as investors returned to select IT heavyweights and Reliance Industries. However, the rebound remained fragile, with crude oil prices climbing above USD 114 per barrel amid escalating tensions in West Asia.
The 30-share BSE Sensex gained 187.68 points, or 0.26 percent, to trade at 73,437.07, while the broader NSE Nifty edged up just 11.10 points, or 0.05 percent, to 22,698.75.
Follow The PSUWatch Channel on Whatsapp
The sharp difference in gains between the two indices reflected the uneven nature of the recovery, with buying concentrated in select heavyweight stocks rather than across the broader market.
Tata Consultancy Services (TCS) emerged as the biggest Sensex gainer, surging more than 3 percent. Infosys, HCL Technologies and Reliance Industries also supported the benchmarks.
Other gainers included Larsen & Toubro, Axis Bank, Bharti Airtel, Sun Pharmaceuticals, ICICI Bank, Asian Paints and ITC.
However, selling pressure persisted in several frontline stocks, including Tata Steel, Titan, Adani Ports, Bharat Electronics Ltd (BEL), IndiGo, Mahindra & Mahindra, Trent, Bajaj Finserv, Maruti Suzuki, Hindustan Unilever and PowerGrid.
The mixed performance suggested that investors remained reluctant to make aggressive bets despite the recent market correction.
The biggest concern for domestic equities remains the sharp escalation in global crude oil prices.
Brent crude, the international benchmark, rose nearly 1 percent to trade above USD 114 per barrel, raising concerns over India's import bill, inflation outlook, corporate profitability and economic growth.
As one of the world's largest crude oil importers, India remains particularly vulnerable to prolonged disruptions in global energy supplies.
Hitesh Tailor, Technical Research Analyst at Choice Broking, cautioned that rising crude prices amid West Asian tensions could restrict the market's recovery despite a positive opening.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, identified the surge in crude prices to USD 114 per barrel as a major negative for both the economy and equity markets.
However, he said easing US bond yields and appreciation in the rupee could help contain foreign portfolio outflows.
Vijayakumar also pointed to the possible return of funds to the market following the Jio Platforms IPO allotment. He expects large-cap stocks to lead any sustained recovery, although weakness in small-cap stocks could continue.
Persistent foreign institutional investor selling remains another challenge for the Indian market.
Foreign Institutional Investors (FIIs) sold equities worth Rs 3,458.70 crore on Thursday, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 2,891.32 crore, according to exchange data.
Although domestic institutions continued to provide support, their purchases were insufficient to fully offset foreign selling.
The sustained withdrawal of foreign capital, combined with elevated energy prices, could make any meaningful market recovery difficult unless global conditions improve.
Asian markets largely traded lower on Friday, reflecting continued investor anxiety over geopolitical developments and energy prices.
South Korea's Kospi, Japan's Nikkei 225 and China's Shanghai Composite traded in negative territory, while Hong Kong's Hang Seng bucked the trend with modest gains.
US equity markets had also ended Thursday's session lower.
Follow PSU Watch on LinkedIN
The domestic benchmarks entered Friday's session after three consecutive days of losses. On Thursday, the Sensex declined 460.30 points to close at 73,249.39, while the Nifty fell 123.70 points to settle at 22,687.65.
The key question for investors is whether Friday's rebound marks the beginning of a sustained recovery or merely a temporary pause in the market's decline. With crude oil above USD 114, foreign investors continuing to withdraw funds and geopolitical uncertainty showing little sign of easing, the sustainability of the recovery remains uncertain.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated.)