Sensex soars over 1,000 points: Top factors behind Friday's bull run

Investors' risk appetite improved on Friday after fears of global banking crisis started to ease, driving domestic markets higher for a third consecutive day. 
 

The S&P BSE Sensex rallied to a high of 59,068, before ending with a solid gain of 1,031 points at 58,992. In the process, the BSE 30-share index edged 0.1 per cent up for the month, and finished FY23 0.7 per cent higher.

Track all that happened in the markets today

The NSE Nifty 50 hit a high of 17,382, and settled 279 points higher at 17,360. The 50-share index advanced 0.3 per cent in March, but was down 0.6 per cent for the fiscal year 2022-23.
 

Index-heavyweight Reliance Industries largely drove overall gains as shares surged over 4 per cent, after the conglomerate decided to demerge its financial services unit from the conglomerate.
 

That apart, broader markets, too, exhibited strength as smallcaps outperformed frontline indices.
 

Analysts, however, remain cautious over sustenance of this recent rebound as markets will face a slew of data driven activity in the coming days.

"Nifty valuations are now reasonable, and this has prompted foreign institutional investors (FIIs) to turn buyers in the last two days. The market is oversold and this can lead to short-covering and a tactical rally in the near-term. But a sustained rally is unlikely since FIIs will again turn sellers at higher levels. The coming days will witness a lot of data or news driven market activity. Auto sales numbers on April 1, Reserve Bank of India's decision on interest rates on April 6, and January-March results season (Q4FY23) starting from April 13, will trigger stock price movements," said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
 

Meanwhile, here are top six factors behind Friday's market run:

Morgan Stanley upgrades India: Global brokerage firm, Morgan Stanley upgraded India to 'equal-weight' from 'neutral' due to narrowing valuation premiums and resilient economy. While analysts remain 'over-weight' on North Asia excluding Japan, they remain 'Under-weight' on ASEAN countries.

Sectorally, analysts remain overweight on financials and consumer discretionary, whereas they were equal-weight on healthcare.
 

Strong global cues: The US markets extended winning streak to the second straight day, after diluting concerns over the banking crisis triggered renewed buying across technology names. Dow Jones, the S&P 500, and NASDAQ Composite advanced up to 0.7 per cent overnight. Moreover, a rise in weekly unemployment claims mounted hopes of a slowdown in monetary policy tightening.
 

Tracking positive moves in Wall Street, Asia-Pacific markets, too, closed higher this morning. Key indices Nikkei 225, Topix, the S&P 200, Kospi, and Hang Seng indices surged up to 1 per cent.

WATCH: Which sectors should you bet on in FY24?
 

RIL leaps ahead: Shares of index-heavyweight Reliance Industries rallied over 4 per cent to Rs 2,333 per share in Friday's intra-day trade, after the conglomerate said that it would meet on May 2, 2023, to mull demerger of its financial services unit. According to the plan, RIL's shareholders would receive shares in the demerged entity for each one held in the company. READ MORE

Turnaround in FII flows: After the global financial turmoil butchered markets, FIIs have turned in favour of Indian markets, on the back of attractive valuations. In the past two days, FIIs have bought equities worth Rs 2,776.5 crore. So far in this month, they bought Rs 1,639.8 crore worth of equities.
 

Rupee strengthens: The rupee appreciated 24 paise to 82.1 in Friday's early trade, following strong global cues, and foreign inflows. The dollar index, which gauges the greenback's strength against six major currencies, meanwhile, closed 0.05 per cent higher at 102.2.
 

Technical factors: Charts suggest that the NSE Nifty index is undergoing time-wise correction, after absorbing a slew of negative news from global markets. Technical analysts expect the benchmark index to hit 17,500-mark after lingering in 'oversold' territory.

WATCH: How will the markets play out in FY24?
 

"We expect the Nifty to resolve the upper upper band of the past 12 sessions range 17,200-16,800, gradually paving the way for heading towards 200 days-EMA placed at 17,500. Structurally, index is undergoing time-wise correction while absorbing a host of negative news globally, after approaching a lower band of four months falling channel. In the process, weekly stochastic approached oversold territory, indicating impending pullback," wrote analysts at ICICI Securities in their daily note.