Sensex surges over 2,000 points, Nifty above 23,900 in afternoon trade

US stocks closed higher on Thursday, with the blue-chip Dow Jones Industrial Average leading the gains for the three major equity indexes. Optimism around year-end, especially around consumers fuelling another crucial holiday-shopping season, helped lift stocks, as did strong earnings from AI-darling Nvidia Corp, said Deepak Jasani, head, retail research at stock broking firm HDFC Securities.

The market can recover from the present levels since Thursday’s selling was largely due to the fallout of the Adani issue.

On Wednesday, US prosecutors charged Adani group Chairman Gautam Adani and seven others of alleged “schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice”. This dragged down Sensex and Nifty by 422 points and 168 points, respectively, on Thursday.

“Considering the headwinds the market is facing, a sustained recovery is unlikely. The strength in the broader market should not be confused with the fundamental strength of the segment. The strength of the broader market, particularly the midcaps, is due to liquidity and not fundamentals,” Vijayakumar said.

Fundamental strength and safety are in large-caps, and banking and IT (information and technology) are fairly valued, Geojit’s Vijayakumar said. FMCG, metals, and oil & gas are weak, he added.

The Nifty has not witnessed follow-through selling pressure from the previous trading session. It has crossed the high of the previous trading session of 23,507, thereby triggering a short-covering rally.

“We expect this positive momentum to continue during the next week as well. On the upside we expect 24,200 – 24,342 levels during the upcoming week. On the downside, crucial support at 23,450 – 23,400 shall act as a crucial support zone and should be kept as a stop loss for the long positions,” said Jatin Gedia, technical research analyst at online brokerage Sharekhan by BNP Paribas.

In the late afternoon trades, all 30 BSE companies were trading in green. Among the NSE lot, the companies that gained the most included State Bank of India (4.96 per cent), Ultratech Cement (3.82 per cent), TCS (3.79 per cent), Tata Consumer Products (3.6), and JSW Steel (3.52 per cent).

Adani group’s flagship company Adani Enterprises’ stock, which tanked 23 per cent on Thursday, was up 0.98 per cent in Friday’s late afternoon trade.