Indian shares rise, end longest weekly losing streak in 25 years

Indian equities rallied on Friday, putting an end to their longest weekly losing streak in 25 years, although gains were modest due to concerns over tighter monetary policy and high oil prices. The Nifty 50 index climbed 1.3% to 22,520.45 and the BSE Sensex increased 1.23% to 72,472.33, driven by IT stocks after Tata Consultancy Services (TCS) reported solid earnings growth fueled by expanding artificial intelligence (AI) revenue and steady international business expansion.

At the end of the week, the Nifty 50 and Sensex had climbed 0.4% and 0.8%, respectively, marking a 8.7% and 8.4% decline over the preceding eight weeks.

Market analysts remain optimistic, predicting further upside potential for the Nifty 50 index if earnings growth continues to meet expectations and crude prices drop below $100 per barrel. Dharmesh Kant, head of equity research at Cholamandalam Securities, expressed his confidence, stating that the market may continue to find support on a technical basis after the recent drop, with the Nifty 50 index potentially rising by 5% under this scenario.

Financials led the week's gains with a 1.7% increase, buoyed by strong quarterly performance reports and the Reserve Bank of India's decision to retain liquidity levels despite the 25-basis-point rate hike. IT stocks, meanwhile, posted a 1% rise for the week. The recent decision by the US government to withdraw some IT firms from the Permanent Labor Certification (PERM) program garnered little investor attention, as traders focused on TCS' strong quarterly results instead. This positive outlook on IT companies follows a two-year downward trend.

Eight out of the 16 major sectors experienced an upward trend throughout the week, including small-cap and mid-cap stocks, which rose 0.5% and 0.1%, respectively. Brent crude oil futures, however, climbed 0.7% to $103 per barrel, as concerns over shipping attacks in the Gulf of Oman persisted over potential disruptions to global energy supplies. India's heavy reliance on oil imports renders higher prices a significant risk to inflation and economic growth.

Notably, Trent, an apparel retailer, led the list of top Nifty 50 gainers, surging 13.1% after posting robust quarterly sales. In contrast, Adani Enterprises recorded a 6.5% decline, ranking as the index's worst performer, due to concerns over GQG Partners potentially reducing its stake in the company after a block deal sale of ITC shares on Thursday.