Indian equities closed higher for a second straight session on Friday, 16 October, led by technology stocks and helped by softer crude oil prices and a firmer rupee. The Sensex gained 413.70 points, or 0.56 percent, to finish at 74,729.27. The Nifty 50 rose 148.80 points, or 0.65 percent, to 23,146.15, moving back above the 23,100 mark.
Information technology shares did most of the work. Tech Mahindra, TCS and Infosys were among the best performers on the Nifty, and the Nifty IT index was the strongest sector of the day. Analysts tied the rally to a breakout from consolidation on Thursday, followed by fresh buying from around the 22,900 level. The oil and gas index was the biggest laggard, as energy stocks stayed under pressure.
Lower crude matters more for India than for most large economies, because the country imports most of the oil it uses. Cheaper crude eases worries about inflation and the import bill, and it tends to improve appetite for risk. That is especially relevant this month, with Brent trading above 100 dollars a barrel because of attacks on shipping near the Strait of Hormuz. The rally also follows the International Monetary Fund’s upgrade of India’s growth forecast to 7 percent, announced on 13 October.
The breadth of the advance was weak. The Nifty Midcap 100 slipped 0.11 percent and the Smallcap 100 was almost flat. Analysts cautioned that the recovery will need earnings growth beyond the IT sector to last, and that global inflation and geopolitical risks remain. Technical watchers see support near 22,800 and resistance near 23,200, with the 50-day moving average in the 23,500 to 23,600 zone as a possible next target. This is a report of market movements, not investment advice, and one session says little about the direction of the trend.