Short covering was seen in the November futures of both the Nifty50 and the Nifty Bank index during the session that helped benchmark indices close higher. The Nifty50 ended 1.3 per cent higher at 18,102.8 points, while the BSE-Sensex closed at 60,686.7 points, up 1.3 per cent.
The gains in the market were driven by banking and information technology stocks. The Nifty IT index jumped 2.1 per cent as the selling pressure in the sector came to an abrupt halt. Similarly, the Nifty Bank index rose 0.5 per cent aided by a jump in covering of short positions by traders.
The risk appetite of investors improved to ensure a positive end to an otherwise lackluster week for the bulls as concerns over inflation, interest rate hikes and muted global sentiment weighed. Today’s gains added Rs. 2.77 lakh crore to investors’ notional wealth.
Sentiments among investors were also aided by the possibility of higher foreign inflows in the coming week as global exchange-traded funds will buy the recently included stocks in the MSCI indices following the index aggregator’s semi-annual review on Thursday.
Investors also shrugged off the downgrading of Indian equities by Goldman Sachs, citing high valuations.
In the broader market, the buying momentum was rather tepid as midcap and smallcap stocks underperformed their largecap peers. The Nifty Midcap 100 and Nifty Smallcap 100 index ended 0.5 per cent and 0.3 per cent higher, respectively.
Overall, volatility in the market also appeared to reduce as the India VIX index closed nearly 7 per cent lower at 15.21 points.
Among individual stocks, shares of Vodafone Idea surged more than 4 per cent after the company reported an impressive earnings performance for the quarter ended September. The telecom major saw an improvement in its operating metrics as well as average revenue per user in the quarter.
Shares of Tata Steel had an underwhelming day as they fell nearly 1 per cent as the company reported lower-than-expected consolidated operating profit and saw a sequential decline in its operating margins in the quarter ended September.
Overall, the breadth of the market was still negative as declining stocks outnumbered advancing ones on the National Stock Exchange.
