Sensex, Nifty Extend Weekly Gains As FII Buying, Earnings Lift Sentiment

Indian benchmark indices ended a volatile week on a positive note, extending gains for the second consecutive week despite the rollout of the new Futures & Options (F&O) Closing Auction Session (CAS). Investor sentiment remained supported by better-than-expected June-quarter earnings, sustained foreign institutional investor (FII) buying, the Reserve Bank of India's decision to keep the repo rate unchanged at 5.25% while retaining its neutral stance, and continued progress of the southwest monsoon.

For the week, the BSE Sensex gained 404.53 points, or 0.51%, to close at 78,499.17, while the Nifty 50 advanced 187.05 points, or 0.76%, to end at 24,570.65.

The total market capitalisation of BSE-listed companies increased by more than ₹7 lakh crore during the week, reflecting broad-based buying across equities. State Bank of India emerged as the biggest wealth creator, followed by Reliance Industries, Tata Consultancy Services and Infosys. Bajaj Finance, HDFC Bank and Power Grid Corporation of India were among the biggest drags on market capitalisation.

Midcaps, Smallcaps Outperform

The Nifty Midcap 100 index rose nearly 1%, led by gains in KEI Industries, Jubilant FoodWorks, Exide Industries, National Aluminium Company, APL Apollo Tubes, One 97 Communications and Godfrey Phillips India. On the downside, Blue Star, BSE, UPL, Container Corporation of India, LIC Housing Finance, Oil India and Voltas ended lower.

The Nifty Smallcap 100 index outperformed, climbing nearly 3%. Neuland Laboratories, Devyani International, Ather Energy, Tata Technologies, Welspun Corp, Pine Labs, Urban Company and Redington gained between 10% and 20%, while Nuvama Wealth Management, Firstsource Solutions, Narayana Hrudayalaya, Inventurus Knowledge Solutions, Star Health & Allied Insurance Company and CreditAccess Grameen were among the major losers.

Sectoral performance remained mixed. Nifty Auto emerged as the top-performing sector with a gain of 3.14%, supported by robust July sales. Nifty IT advanced 2.7% on positive earnings, while Nifty FMCG rose 0.6% and Nifty Oil & Gas added 0.5%. On the downside, Nifty Media declined 4%, Nifty Capital Markets fell 2%, and Nifty Realty slipped 1.7% amid profit booking.

FIIs Extend Buying Streak

Foreign institutional investors remained net buyers for the second consecutive week, purchasing equities worth ₹2,887.69 crore. Domestic institutional investors also continued their buying momentum, investing ₹7,767.37 crore during the week, providing additional support to the market.

The rupee also strengthened for the second straight week, appreciating 18 paise to settle at 95.21 against the US dollar on Friday from 95.39 a week earlier. During the week, the domestic currency traded in the 94.92-95.40 range, supported by sustained foreign fund inflows and positive sentiment following the RBI's policy outcome.

Santosh Meena, Head of Research at Swastika Investmart, said the market largely remained in a consolidation phase despite posting weekly gains, with the sharp fall in crude oil prices early in the week providing the initial boost. He noted that the introduction of the Closing Auction Session remained the biggest talking point, attracting criticism due to disruptions in closing prices and unusual activity in index options, although he expects the system to stabilise as liquidity improves and market participants adapt.

Macro Data, Global Cues in Focus

Looking ahead, Meena said investors will closely monitor the latest US non-farm payrolls data, which came in below expectations and reduced the probability of a US rate hike, a development that could support emerging markets such as India.

Domestically, the release of India's CPI inflation data on August 12 and WPI inflation on August 14 will remain key events. In the US, investors will track CPI and PPI inflation data, along with retail sales and home sales figures.

According to Meena, geopolitical developments involving the US and Iran, movements in crude oil prices, the US Dollar Index and Treasury yields, the performance of Korean markets and AI-related stocks, the remaining June-quarter earnings announcements, the progress of the southwest monsoon and developments during Parliament's Monsoon Session will all remain important triggers for Indian equities in the coming week.

On the technical front, Meena said Nifty has crossed the important 24,500 level but faces immediate resistance around its 200-day moving average near 24,770. A sustained move above that level could pave the way towards the 25,000-25,180 zone, while 24,500-24,300 is expected to act as the key support area. Bank Nifty, meanwhile, continues to consolidate above key moving averages, with the 58,300-58,600 zone remaining the immediate resistance and 57,500 acting as the first support.