Nifty holds above 24,350, Sensex up 166 pts; broader markets lead

Market opens in green

Indian equity benchmarks began Friday's session on a firm footing, with the Nifty comfortably holding above the 24,350 mark. The Sensex added 166 points in early trade, extending the previous session's momentum. Investors appeared confident, though volumes were moderate as the market digested a mix of global cues and domestic earnings.

The broader indices outperformed the frontline gauges, suggesting a risk-on mood among market participants. Midcap and smallcap stocks saw stronger buying interest, a sign that the rally was not limited to heavyweight names.

Broader markets take the lead

The Nifty Midcap 100 and Smallcap 100 indices traded with gains of about half a percent each, comfortably outpacing the benchmark indices. Market breadth was positive, with more stocks advancing than declining on the National Stock Exchange. Analysts said the broader market's outperformance reflects improving investor confidence in the broader economy, although they cautioned that volatility could return if global risks resurface.

While the Nifty hovered near its record high, the uptick in midcaps and smallcaps suggests that money is rotating into relatively undervalued segments. The Bank Nifty also traded firm, contributing to the positive sentiment, though financials lagged slightly behind the broader rally.

Key movers and sectoral trends

IT and pharma stocks led the gains on the Nifty, while metal and energy shares also traded higher. On the flip side, FMCG and auto stocks were mixed, with selective buying and profit booking observed. Among individual stocks, several midcap names hit fresh 52-week highs, underscoring the breadth of the rally.

Foreign institutional investors remained net buyers in the cash market, while domestic institutions were also active on the buy side. The rupee was largely steady against the dollar, providing little directional cue to the market. Analysts noted that the market's resilience has been underpinned by strong earnings growth and expectations of continued policy support.

Global cues supportive, but risks remain

Overseas markets were mostly positive, with Asian peers trading higher on Friday. US futures pointed to a steady open, though investors kept an eye on upcoming economic data and central bank commentary. The relative calm in global markets has helped Indian equities sustain their upward bias.

However, traders remain cautious ahead of the weekend, with some suggesting that the market could see profit booking if the Nifty fails to break above key resistance levels. Crude oil prices were stable, easing concerns about inflationary pressures. The volatility index, India VIX, was flat, indicating that investors are not overly worried about near-term swings.

What to watch next

In the coming sessions, all eyes will be on the Nifty's ability to hold above 24,350 and push towards fresh highs. The broader market's strength will be tested by upcoming earnings and macroeconomic data, including manufacturing PMI figures due next week. Market participants will also monitor global cues, especially the US Federal Reserve's stance on interest rates, for further direction.