Key Highlights

  • Second straight gain: The Sensex rose 308.49 points, or 0.42%, to 74,459.53, and the Nifty gained 116.35 points, or 0.51%, to 23,053.10.
  • IT leads: The Nifty IT index was the best-performing sector, helped by a rotation away from crowded global AI trades. Pharma also saw strong buying.
  • Broader market weak: The Nifty MidCap 100 fell 0.93% and the Nifty SmallCap 100 dropped 1.85%.
  • Top Nifty gainers: Trent, InterGlobe Aviation and Infosys. Consumer Durables was the weakest sector.
  • Key levels: Analysts see the outlook as positive while the Nifty holds above 22,800, with 23,250 as the breakout trigger.

Mumbai: Friday's session showed a clear split between frontline stocks and the rest of the market. The benchmark indices closed higher for a second straight day on strong buying in IT and pharma stocks, while midcaps and smallcaps came under heavy selling.

The Sensex advanced 308.49 points, or 0.42 per cent, to settle at 74,459.53. The Nifty gained 116.35 points, or 0.51 per cent, to close at 23,053.10. Strength in heavyweight IT companies helped Indian equities outperform most of their Asian peers.

Among Nifty constituents, Trent, InterGlobe Aviation and Infosys were the top gainers. The Nifty IT index was the best-performing sector, and pharma shares also saw strong demand. The Nifty Consumer Durables index was the biggest sectoral loser.

Why IT Stocks Bounced Back

The main driver was global. The unwinding of crowded artificial intelligence-linked trades in global markets improved the outlook for Indian technology stocks. As money moved out of expensive AI bets, investors found value in large Indian IT services companies.

"Large-caps showed relative resilience, supported by IT, where selective buying emerged amid a rotation away from global AI plays, while pharma and healthcare gained on encouraging earnings and defensive demand," market experts said.

The broader market told a different story. The Nifty MidCap 100 declined 0.93 per cent, and the Nifty SmallCap 100 fell 1.85 per cent. This gap suggests investors are choosing safety, preferring large, liquid stocks with earnings visibility over riskier small-caps. For retail investors with heavy small-cap exposure, the day may have felt very different from what the headline index gains suggest.

Nifty Technical Outlook: Levels to Watch

Experts said the Nifty broke out after a few sessions of consolidation, closing above the crucial 22,800 level and decisively reclaiming its 20-day moving average (20-DMA).

"On the 3-hour chart, a symmetrical triangle pattern is developing, with a breakout above 23,250 required for confirmation. The short-term outlook remains positive as long as the index sustains above 22,800," analysts said.

"Traders can consider booking partial profits near 23,250 while holding the remaining long positions with a trailing stop-loss of 22,950," market watchers added.

Going into next week, the market's direction will depend on whether the rally can spread beyond IT and pharma. A sustained move above 23,250 with recovery in midcaps and smallcaps would signal broader confidence. If the broader market keeps falling, the benchmark gains may stay narrow and fragile.

With inputs from IANS