CHENNAI: Indian equity benchmarks were trading with a firm undertone in midmorning deals on Friday, (December 19), as sentiment improved after a cautious start to the session. The Sensex and the Nifty held on to early gains, supported by positive global cues and selective buying in heavyweight stocks, even as investors remained mindful of recent volatility and key resistance levels.
At around 12.30 pm, the Sensex was trading near the 84,900–85,000 zone, up by around 350-400 points from the previous close, while the Nifty 50 was holding firm close to the 25,900–25,950 levels, reflecting sustained buying interest in mid-day trade.
The market mood was lifted by encouraging cues from overseas markets, where risk appetite improved following signals of easing inflationary pressures in the United States. This revived expectations that global central banks could eventually adopt a more accommodative stance, lending support to emerging market equities, including India. Asian markets were largely higher, and that positivity spilled over into domestic trade.
"Global markets were trading with a positive bias, led by firm gains in US equities after lower-than-expected November consumer price inflation data reinforced expectations of further interest-rate cuts by the US Federal Reserve, triggering a shift toward a risk-on environment. Asian markets also traded higher, with the Nikkei 225 and Kospi inching up in early trade, albeit with cautious optimism ahead of the Bank of Japan’s monetary policy decision. With volatility contained and global liquidity conditions supportive, the overall backdrop remains constructive and is likely to lend a mildly positive undertone to Indian markets at the open," said Enrich Money CEO R Ponmudi.
Within the Indian market, buying interest was seen across a wide range of sectors, indicating a broad-based recovery after recent weakness. Financial stocks provided steady support to the indices, helped by selective accumulation in frontline private lenders and insurance names. Information technology stocks also traded in the green, benefiting from a softer dollar and improved global sentiment, while pharmaceutical shares saw renewed interest amid defensive buying. Mid-cap and small-cap stocks participated in the upmove as well, although investors remained selective after the sharp swings witnessed earlier in the week.
Market participants viewed the midmorning strength partly as a technical rebound after several sessions of consolidation and mild declines. Traders were seen covering short positions, while long-term investors selectively added quality stocks at lower levels. However, volumes were moderate, suggesting that many investors were still waiting for clearer direction before taking aggressive positions.
"Indian equities opened on a positive note amid broad-based buying across sectors, as lower-than-expected US inflation data revived expectations of further interest-rate cuts by the US Federal Reserve, triggering a global risk-on sentiment. Adding to the optimism, data showing FIIs turning net buyers of domestic equities on Thursday, along with a mild recovery in the Indian rupee against the US dollar, provided additional comfort to domestic investors and supported early market sentiment," Ponmudi said.
The rupee’s relatively stable performance against the US dollar also aided sentiment, reducing immediate concerns around imported inflation and foreign fund outflows. Foreign institutional activity was mixed, but there were signs of marginal buying interest, which helped underpin the indices during mid-session trade, he added.
Despite the positive bias, caution remained evident. Analysts noted that the benchmarks were approaching important resistance zones, and a decisive breakout would be required to confirm a sustained upward move. Any disappointment from global developments or renewed volatility in currencies and bond yields could quickly cap gains.