Market heavyweights do heavy lifting; benchmarks rebound nearly 1%

Sensex and Nifty end the week down 0.7 per cent as FPIs pull back on US fiscal worries; Friday sees rebound with gains in Reliance and easing US bond yields

Equity benchmark indices Sensex and Nifty rebounded sharply by nearly 1 per cent on Friday, buoyed by heavy buying in market heavyweights Reliance Industries (RIL), HDFC Bank, and ITC. The recovery was powered by  a softening in US Treasury yields, which improved risk appetite across global equities. 

The Sensex surged 769 points, or 0.95 per cent, to close at 81,721, while the Nifty 50 climbed 243 points, or 0.9 per cent, to end the session at 24,835 points. 

BSE-listed firms’ total market capitalisation surged by ₹3 trillion to touch ₹442 trillion.  The rupee appreciated by 0.9 per cent on Friday, the highest single-day gain since November 11, 2022, to settle at 85.21 per dollar. For the week, however, Sensex and Nifty declined by 0.7 per cent. The indices marked its best weekly run since April 18 last week as investors cheered a truce with Pakistan, trade talks with the US, and expectations of domestic interest rate cuts. 

 

Long-dated US bond yields eased over the last two sessions after rising during the week.  The 30-year US bond yield, after hitting its highest since October 2023, declined on Friday. It was trading at 4.98 per cent. The 10-year US bond yield was trading at 4.45 per cent on Friday, declining seven basis points. 

Rising yields make US bonds more appealing and often prompt FPIs to withdraw from emerging markets, including India. Bond yields and other haven assets grew during the week as investors fretted about the impact of US President Donald Trump’s tax Bill. Gold posted its best weekly gains since April 11.   

The tax-and-spending bill, fulfilling several of Trump’s populist promises, is expected to add about $3.8 trillion to the US government's $36.2 trillion debt over the next decade. Concerns over the US government debt triggered a credit rating downgrade by Moody's last week.  

In the last leg of the results season, the US trade policy and monsoons will determine the market trajectory going forward.

Meanwhile, Trump has threatened a 50 per cent tariff on EU goods starting June 1. 

Trump's latest salvo is a grim reminder that trade tensions are far from over and how it can disrupt equity markets on short notice. 

“The ongoing earnings season is entering its final phase next week, with investors closely tracking corporate performance across sectors. The arrival of pre-monsoon showers across parts of India lifted the market mood ahead of an anticipated above-normal monsoon, which is expected to support rural demand and broader economic activity. Looking ahead, markets are expected to remain firm, with participation likely from the broader market segments as macro and earnings tailwinds continue to provide support,” said  Siddhartha Khemka, head — research, wealth management, Motilal Oswal Financial Services. 

Foreign Portfolio Investors (FPIs) were net buyers to the tune of ₹1,795 crore, and domestic institutions bought shares worth ₹300 crore.