The Moody’s India’s sovereign credit rating jump cheered the Dalal Street and increased the investors' confidence on Friday. Both the key indices, Sensex and Nifty, ended with more than 0.5 per cent gains, triggered by financial and metal stocks. The markets were bullish on the opening but the momentum failed to carry on as investors rushed in to save profit as the index closed the day at 33,342.80, up 235.98 points -- or 0.71 per cent.
As the gauge had rallied 346 points in the previous session, the rating action by Moody's became apparent right in the opening session that saw the BSE index shoot up 414 points at one point.
The 50-share Nifty raced past the key 10,300-mark during the day, only to come off the high and end at 10,283.60, a gain of 68.85 points, or 0.67 per cent.
For the week, the Sensex eked out gains of 28.24 points, or 0.08 per cent, but the Nifty dropped 38.15 points, or 0.36 per cent.
Investor risk appetite soared after the US-based Moody's upgraded India's sovereign credit rating by a notch to 'Baa2' with a stable outlook citing improved growth prospects driven by economic and institutional reforms.
The rating upgrade came after a gap of 13 years -- Moody's had last upgraded India's rating to 'Baa3' in 2004.
"This is a positive development for India as an improved rating will help the country attract more foreign investments while its equity markets will now fall within the investment mandate of more global fund managers," said Karthikraj lakshmanan, Senior Fund Manager – Equities, BNP Paribas Mutual Fund.
In sync with equities, the rupee too strengthened considerably.
There was support from Asian markets, which took leads from Wall Street after the US House's passage of the Republican tax cut plan.
European shares too ruled high. Banking counters led from the front. ICICI Bank, HDFC Bank and SBI climbed by up to 1.86 per cent.
Barring IT and technology, which lost over 1 per cent, all other sectoral indices witnessed gains. Realty jumped by the biggest margin.
Cipla was the leader of the Sensex chart, gaining 2.64 per cent after the company said it has received final approval from the US health regulator for its suspension product. HDFC ltd came in next, up 2.23 per cent.
Maruti Suzuki gained 2.15 per cent after Japanese auto majors Toyota Motor Corporation and Suzuki Motor Corporation said they will co-operate on introducing electric vehicles (EVs) in India by 2020.
IT stocks such as Infosys, TCS and Wipro, however, struggled. They fell up to 1.79 per cent as the stronger rupee means lesser revenues from the US and Europe.
Domestic institutional investors (DIIs) pocketed shares worth a net Rs 847.45 crore while foreign portfolio investors (FPIs) sold equities worth a net Rs 447.42 crore, as per provisional data. Broader markets played along, with mid-cap and small cap indices adding up to 1.03 per cent. PTI