The Sensex and the Nifty ended with gains on Friday, led by banking and auto heavyweights such as Mahindra and Mahindra, IndusInd Bank, and Tata Motors.
On a weekly scale, both key indices turned green, ending nearly 1 percent higher during the holiday-truncated week ended December 27. In contrast, they had plunged 5 percent the previous week.
The domestic market witnessed low volatility in the absence of fresh triggers and traded on a positive note throughout the session on value-buying in select heavyweights.
The Sensex closed at 78,699.07, up 227 points, or 0.29 percent. The Nifty 50 settled 63 points, or 0.27 percent, higher at 23,813.40.
Shares of Mahindra and Mahindra (M&M), IndusInd Bank, Bajaj Finance, and Tata Motors emerged as the top index gainers, rising 1-2 percent. ICICI Bank, HDFC Bank, Infosys, and Reliance Industries were the top contributors to the Sensex index.
Amid a lack of fresh triggers, the volatility index, India VIX, declined nearly 6 percent on Friday, reflecting investors' anticipation of a stable market in the short term.
The BSE Midcap index underperformed the Sensex, ending 0.08 percent lower. However, the BSE Smallcap index climbed 0.28 percent, in line with the BSE benchmark.
The Nifty Pharma index rose 1.30 percent, while the Nifty Auto index added a percent. Nifty Bank climbed 0.27 percent while the Private Bank index gained 0.49 percent. However, the PSU Bank index fell 0.89 percent. Nifty Metal, Oil and Gas and Realty indices declined up to a percent.
Prashanth Tapse of Mehta Equities pointed out that despite ending higher for the second straight session, markets lacked conviction as indices came off their early highs amid late profit-taking in several sectoral stocks.
"The mood remains that of caution as foreign investors have not softened their stance on Indian equities with the rupee's record fall against the dollar continuing to create uncertainty amongst the investors," said Tapse.
Ajit Mishraof Religare Broking said the markets continue to face resistance on the upside, reinforcing the negative outlook on the index.
However, Mishra underscored that individual stocks are presenting opportunities on both sides, driven by noticeable strength in defensive sectors like pharma and healthcare, as well as a rebound in select heavyweights from other sectors.
"We maintain our view to stay stock-specific and hold positions on both sides," said Mishra.
(By arrangement with livemint.com)