- Indian equity benchmarks surged Friday, driven by global market optimism.
- Rupee strengthened early but faces persistent geopolitical volatility risks.
- RBI directive on bank positions to influence near-term currency movements.
Indian equity benchmarks ended the week on a strong note on Friday, tracking gains in global markets, even as geopolitical concerns around the Strait of Hormuz continued to linger.
The BSE Sensex settled the session around 77,550, soaring more than 900 points, while the NSE Nifty50 closed trading near 24k, jumping more than 250 points.
Notably, both benchmarks traded firmly in positive territory through the session, reflecting resilience despite ongoing tensions in West Asia.
Top Gainers And Losers Today
Gains in the benchmark indices were largely driven by select heavyweight stocks, with Asian Paints, Eicher Motors, Bajaj Auto and Shriram Finance leading the advances on the Nifty.
Broader markets, however, delivered stronger performance than the frontline indices, signalling robust participation from investors beyond large-cap stocks. The Nifty MidCap index ended 1.48 per cent higher, while the Nifty SmallCap index rose 1.67 per cent.
Sector-wise, the trend remained mixed. The Nifty IT index emerged as the top performer, supported by buying interest in technology stocks. On the other hand, indices such as Nifty Auto, Nifty Bank and Nifty Financial Services lagged behind, underperforming the broader market during the session.
Rupee Gains Early, But Volatility Risks Remain
The Indian rupee strengthened in early trade on Friday, rising 10 paise to 92.41 against the US dollar, even as underlying risks from global geopolitical tensions persisted.
The currency opened at 92.58 in the interbank foreign exchange market and firmed up during initial deals, building on Thursday’s marginal gain when it had settled at 92.51 against the greenback.
RBI Position Curbs To Drive Near-Term Moves
Forex market participants expect heightened intra-day volatility, with the deadline for the Reserve Bank of India’s directive on limiting banks’ overnight open positions to $100 million coming into effect.
According to market experts, a large portion of these positions, estimated at around 80-85 per cent, has already been unwound. This suggests that the earlier support to the rupee from these flows is now diminishing.
Analysts indicated that the rupee’s near-term strength could be capped as domestic support fades and global risks remain elevated.
Energy Shock Impact
Market participants noted that the recent volatility in energy prices has not translated into a proportionate decline in equities.
Crude oil prices remained firm, with Brent crude trading 0.51 per cent higher at $96.44 per barrel.
Uncertainty around the reopening of the Strait of Hormuz, a critical global energy route, continues to underpin oil prices, adding to inflation concerns for import-dependent economies like India.
Global Risks Cast Shadow On Growth Outlook
The broader macroeconomic outlook remains sensitive to geopolitical developments. The World Bank has flagged that India’s growth projection of 6.6 per cent for FY27 could face risks from escalating global tensions, particularly the Iran conflict.
While India continues to benefit from strong forex reserves and a stable banking system, analysts cautioned that pressure points are gradually emerging.
