Indian equity benchmark -- Nifty -- ended the volatile session with gains on Friday, led by gains in IT and Auto stocks. Index made a decent start, as support came in with foreign fund inflows. Provisional data from the NSE showed foreign institutional investors (FIIs) bought shares worth Rs 1,513.41 crore on January 4. Some support came as India’s services sector witnessed pick-up in growth during the month of December, as demand buoyancy spurred sales, subsequently fuelling business activity. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index jumped to 59.0 in December from 56.9 in November. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 58.5 in December as against 57.4 in November.
However, in late afternoon session, index cut all of its gains and turned negative, as traders got cautious with Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh’s statement that India will have to eventually move to a lower customs duty regime and cannot continue to protect domestic manufacturers by citing infant industry argument. But soon, index staged recovery to end with minor gains, as sentiments were positive with the United Nations stating that India registered strong investment performance in 2023, driven by government infrastructure projects and multinational investments. It noted that India is benefiting from growing interest from multinationals, which see the country as a key alternative manufacturing base in the context of developed economies' supply chain diversification strategies.
Traders were seen piling up positions in IT, Auto and Realty stocks, while selling was witnessed in Healthcare, PSU Bank and Pharma. The top gainers from the F&O segment were Birlasoft, Info Edge (India) and Hindustan Aeronautics. On the other hand, the top losers were Nestle India, Shree Cement and Gujarat Narmada Valley Fertilizers & Chemicals. In the index option segment, maximum OI continues to be seen in the 21900 - 22100 calls and 20900 - 21100 puts indicating this is the trading range expectation.
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