Indices gain nearly 1% to end week at 5-month high; Sensex up 629 points

A combination of gains in Reliance Industries, IT heavyweights and positive global cues helped the Indian indices end the week at their highest levels in five months. 

The Sensex ended the session at 62,502 points, gaining 629 points or 1.02 per cent while the Nifty50 ended the day at 18,499 points, a gain of 178 points or 0.97 per cent. Friday's close is the highest for both indices since December 14, 2022.

Reliance Industries rose 2.8 per cent on Friday and contributed the most to index gains. IT stocks were up on the back of gains in technology stocks in the US.

In the US and Europe, stocks of chipmakers also gained after they posted better than expected results. Foreign portfolio investors (FPIs) remained net buyers as they bought shares worth Rs 350 crore on Friday, according to provisional data from exchanges.

"The tone was positive in the index amid consolidation, and now, recovery in the US markets -- combined with improved participation from the IT sector -- have provided the needed trigger. Besides, a strong surge in heavyweights like Reliance further added to the positivity,' said Ajit Mishra, vice president, technical research, Religare Broking

News of progress in US debt ceiling negotiations further enthused investors as reports suggested that Republican and White House negotiators have narrowed differences in talks over recent days and are moving closer to an agreement to raise the debt limit and cap federal spending for two years.

However, analysts warned that there's still a prospect of negotiations breaking down over the weekend or resulting in steep spending cuts that could cripple global economic growth. Some analysts said the spending cuts demanded by Republicans could cost as many as 570,000 jobs.

For the week though, Indian equity markets had traded flat amid concerns about the US debt negotiations and renewed fears of rate hikes. The US personal consumption expenditures price index, one of the Federal Reserve’s preferred inflation gauges, rose by a faster-than-expected 0.4% in April, fuelling concerns that the US central bank has its work cut out to bring inflation back to its target.

Besides the US inflation numbers, Indian macroeconomic data due next week will likely determine the market trajectory.

"After consolidating for the last few days, the Nifty50 has surpassed the resistance of 18,450 zones. We expect this momentum to continue and the 50-shae index to touch its previous lifetime high in the coming weeks. The index is now just 380 points or 2% away from its lifetime high. With the results season nearing its end, the focus will shift to macro data, US debt negotiations and upcoming central bank policy meetings," said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

The market breadth was strong, with 1,907 stocks gaining and 1,600 declining. All the Sensex constituents, barring three, gained. Realty stocks gained the most, and its sectoral index on the BSE rose 1.3 per cent.