Market Extends Gains In Special Trading Session; Sensex & Nifty Continue Upward Momentum

The domestic equity benchmarks Sensex and Nifty 50 extended their rally into the weekend, continuing a three-day surge driven by fresh foreign fund inflows and favourable global market conditions. In the special trading session, all sectoral indices closed in the green, with small and midcap stocks outperforming their larger counterparts.

In the second half of the special session, the 30-share BSE Sensex climbed 88.91 points, or 0.12%, to close at 74,005.94, while the NSE Nifty 50 increased by 35.90 points, or 0.16%, to settle at 22,502.00. The broader market showed even more robust performance, with the Nifty Midcap 100 rising 0.51% and the Nifty SmallCap 100 advancing by 0.82%. Meanwhile, the volatility index, India VIX, saw a 3.67% increase, closing at 20.52, signalling higher market uncertainty.

The day's trading was part of a planned special session aimed at assessing the exchanges' readiness for significant disruptions. This session featured an intra-day switchover between the Disaster Recovery (DR) site and the Primary Site (PR), with trading occurring from 9:15 to 10:00 IST from the PR site and from 11:30 to 12:30 IST from the DR site.

During the first half of the session, the Sensex ended at 73,959.63, up 42.60 points, or 0.06%, while the Nifty 50 closed at 22,481.90, gaining 15.80 points, or 0.07%. This setup allowed the exchanges to verify their operational resilience and ensure uninterrupted trading even in the event of technical failures.

A significant factor in the market's positive trajectory was the renewed interest from Foreign Institutional Investors (FIIs). After a period of continuous outflows, FIIs returned as net buyers on Friday, purchasing stocks worth Rs 1,616.79 crore. This infusion of foreign capital bolstered investor confidence and contributed to the market's upward momentum.

Global cues also played a crucial role in the domestic market's performance. Wall Street closed mostly higher on Friday, buoyed by expectations of a Federal Reserve rate cut in September. The Dow Jones Industrial Average hit a record high of 40,000 points, while April's inflation data came in softer than anticipated, reducing concerns about aggressive monetary tightening.

The special trading session saw a broad-based rally across various sectors. Leading the charge were Nestle India Ltd, which surged 2.23%, and Power Grid Corporation of India Ltd, which rose 0.91%. Other notable gainers included Tata Motors Ltd (up 0.88%), Adani Ports and Special Economic Zone Ltd (up 0.70%), and Hindalco Industries Ltd (up 0.66%).

On the downside, JSW Steel Ltd was the top loser, falling 1.79%. Other laggards included Mahindra and Mahindra Ltd (down 0.42%), UltraTech Cement Ltd (down 0.37%), LTIMindtree Ltd (down 0.24%), and Maruti Suzuki India Ltd (down 0.23%).

Despite the positive close, the rise in India VIX above the 20 mark, ending at 20.52, suggests heightened market volatility. Investors are advised to remain cautious as the increased volatility index indicates potential market fluctuations in the coming days.

With the influx of foreign capital and supportive global cues, the market appears poised for continued growth. However, the elevated India VIX level calls for vigilance as investors navigate through potential market swings.