Indian equities broke an eight-week losing streak, but the modest rebound offered limited reassurance as crude oil climbed above $100 a barrel and the central bank took a hawkish stance after a 25-basis-point rate hike.
The Nifty 50 rose 1.30% in the Friday session to 22,520.45, while the Sensex gained 1.23% to 72,472.33. Their weekly gains were narrower, at about 0.43% and 0.78%, respectively, halting the prolonged decline without establishing a convincing recovery.
Tanvi Kanchan, associate director at Anand Rathi Shares & Stock Brokers, described the advance as a relief rally, with elevated oil prices, rupee weakness and high US bond yields continuing to weigh on sentiment.
Valuations had become more supportive, she said, with the Nifty trading around 19 times trailing earnings, below its long-term median. A sustained recovery, however, would require easing foreign selling, broader sector participation and an end to earnings downgrades.
Sumit Singhania, head of research at Bajaj Broking, echoed this: “A combination of falling crude, easing inflation and improving foreign flows would offer the clearest signal of a transition from the current cautious phase to a sustainable recovery.”