Media365
Benchmark indices Sensex and Nifty ended marginally lower during the special Muhurat Trading session on Diwali, taking a breather after a more than 10 per cent rally over seven sessions, supported by strong foreign investor inflows, falling crude oil prices and upbeat corporate earnings.
Indian equity markets ended Sunday’s special Muhurat Trading session on a subdued note, with benchmark indices Sensex and Nifty closing marginally lower after a seven-session rally.
The Nifty 50 declined 0.18 per cent to settle at 24,986.4, slipping below the 25,000 mark, while the BSE Sensex fell 0.04 per cent to close at 80,999.4. Trading was conducted during a special one-hour window to mark Diwali.
The muted performance followed a strong rally in domestic equities, with both benchmark indices gaining more than 10 per cent in the seven trading sessions leading up to Friday.
The recent gains were supported by a sharp decline in crude oil prices following the US midterm election results, which improved investor sentiment towards Indian equities.
Foreign portfolio investors (FPIs) also returned to domestic markets in a big way. They purchased shares worth Rs 45,961 crore ($4.89 billion) over five trading sessions last week. The buying included their biggest single-day investment in Indian equities in nearly six years on Thursday.
The decline in crude oil prices has eased concerns over inflation, India’s import bill and pressure on the rupee. Strong foreign investor buying, supportive global cues and better-than-expected September-quarter earnings have further strengthened the market rally.
More from BusinessPharma, metal stocks lead sectoral gains
Market performance remained mixed during the special trading session, with seven of the 16 major sectoral indices ending in positive territory.
The pharmaceutical index emerged as one of the top performers, gaining 1.7 per cent. Divi’s Laboratories led the gains, with its shares jumping 7.5 per cent after the company reported a 64 per cent year-on-year increase in quarterly profit.
The metal index advanced 0.4 per cent, supported by a 2.1 per cent rise in Tata Steel shares. The company reported an 18 per cent increase in operating profit, while positive brokerage commentary on its India business also supported investor sentiment.
Among broader market indices, the Nifty Smallcap 100 rose 1 per cent, while the Nifty Midcap 100 gained 0.1 per cent.
Low valuations, earnings growth offer support
Despite the recent rally, the outlook for Indian equities remains supported by relatively attractive valuations and expectations of strong corporate earnings growth.
The combination of these factors could potentially drive substantial returns for investors over the coming year, with market participants looking towards the next Diwali for further gains.
