Indian equity markets ended their eight-week losing streak, the longest in 25 years, after a volatile week in which benchmarks recovered on buying in information technology (IT), fast-moving consumer goods (FMCG), automobile and financial stocks. However, persistent foreign fund outflows, elevated crude oil prices, rising global bond yields and uncertainty over the monetary policy outlook continued to weigh on investor sentiment.
For the week, the BSE Sensex gained 562.63 points, or 0.78%, to close at 72,472.33, while the Nifty 50 advanced 98.5 points, or 0.43%, to settle at 22,520.45.
The recovery gathered momentum on Friday, October 9, when the Sensex surged 879.09 points, or 1.23%, to 72,472.33. The Nifty 50 climbed 288.65 points, or 1.30%, to end at 22,520.45, snapping the benchmarks' eight-week losing streak.
"Markets snapped an eight-week losing streak, posting modest weekly gains as easing crude oil prices and positive corporate updates supported a late-week recovery. However, volatility remained elevated following the RBI’s decision to raise the repo rate by 25 basis points to 5.50% and shift its policy stance towards calibrated tightening," said Ajit Mishra, SVP – Research, Religare Broking.
Despite the rebound, market participants will look for stronger follow-through buying to determine whether the recovery can extend into the coming week. Several domestic and global developments, including inflation data, corporate earnings, crude oil prices and foreign investor flows, are likely to influence the market's direction.