InvestorQ : Why did the Nifty and Sensex bounce back sharply on Friday 26th April 2019?
Lavanya Subramanian made post

Why did the Nifty and Sensex bounce back sharply on Friday 26th April 2019?

ishika Banerjee answered.
2 years ago

The markets have been extremely volatile during the week and have seen alternate bouts of rise and corrections. On Thursday, the Nifty had corrected sharply by nearly 350 points on F&O unwinding on expiry day and Friday actually saw a reversal of that trend.

Positive economic cues from oil and the Rupee

The rally in oil prices appeared to have hit a roadblock after touching a high of $75.6/bbl for the current year. On Friday, crude oil prices fell by nearly 3% to $72.15/bbl and that was a positive trigger for Indian markets since India still depends on imported oil for 75% of its daily crude oil requirements. This sharp fall in oil prices also strengthened the rupee which came back closer to the 70/$ mark. Of course the positive flow figures from FIIs have also been helpful for the market and Thursday saw nearly Rs.3,785 crore of FII inflows.

Outcome of the Reuters survey on central bank policy also played a part

One of the reasons why the markets bounced back on Friday was also because of the outcome of the Reuters Survey. What emerged from the survey was that global central banks may have reached the end of the rate tightening cycle and the focus will be again on loosening up credit and liquidity. That is good news for India as sufficient liquidity means that FII flows could still gravitate towards India. The Reuters survey also pointed towards a gradual recovery in global growth in the next 2 years.