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Domestic markets notched solid gains on Friday, fueled by optimism surrounding the upcoming budget in July. The Nifty 50 plunged to 23,334.25 at the open but staged a dramatic comeback, reaching a record high of 23,490.40 by the closing bell. Auto and consumer durables stocks led the charge, while IT stocks weighed on the index.

The S&P BSE Sensex climbed 181.87 points or 0.24% to 76,992.77. The Nifty 50 index rose 66.70 points or 0.29% to 23,465.60. The 50-unit index has risen 0.89% in four straight sessions.

Mahindra & Mahindra (up 2.20%), HDFC Bank (up 1.05%) and Reliance Industries (up 0.88%) were major index movers.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rallied 1.18% and the S&P BSE Small-Cap index added 1.03%. Both the indices hit their all-time highs today.

The market breadth was strong. On the BSE, 2238 shares rose and 1625 shares fell. A total of 117 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, dropped 4.93% to 12.82

Economy:

India's wholesale inflation spiked to a 15-month high in May, reaching 2.61% year-on-year, according to government data released Friday. This marks a significant jump from April's 1.26% inflation rate.

The latest surge is attributed to rising prices in food items, processed food products, crude oil & natural gas, mineral oils, and other manufactured goods.

Further, India's merchandise exports grew 9% in May 2024, reaching $38.13 billion compared to $34.95 billion last year. However, imports also rose 7.7% to $61.91 billion, resulting in a trade deficit of $23.78 billion.

Numbers to Track:

The yield on India's 10-year benchmark federal shed 0.04% to 6.983 as compared with previous close 6.986.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.5550, compared with its close of 83.5400 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement rose 0.91% to Rs 71,786.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.37% to 105.58.

The United States 10-year bond yield fell 0.72% to 4.209.

In the commodities market, Brent crude for August 2024 settlement lost 10 cents or 0.12% to $82.65 a barrel.

Global Markets:

The Dow Jones index futures were down 254 points, indicating a weak opening in the US stocks today.

Markets in Europe declined across the board while Asian stocks ended mixed on Friday.

The Bank of Japan (BoJ) kept its benchmark interest rate unchanged at between 0% and 0.1% but indicated it?s considering the reduction of its purchase of Japanese government bonds after the next monetary policy meeting scheduled for 30 and 31 July 2024.

U.S. stocks continued their historic rally on Thursday, with the S&P 500 and Nasdaq closing at new highs for the fourth consecutive day. Tech stocks led the charge, pushing the Nasdaq Composite up 0.34%.

In a sign that the Federal Reserve might lower interest rates soon, new data showed a rise in unemployment claims last week and an unexpected drop in producer prices for May.

Stocks in Spotlight:

Mahindra & Mahindra surged past Tata Motors to become India's No. 2 auto company by market cap.

Tata Motors rose 0.78% (m-cap: Rs 3,30,204.07 crore). Mahindra & Mahindra climbed 2.20% to hit a 52-week high of Rs 2945 today (m-cap: Rs 3,63,980.89 crore).

Defense stocks were in demand. Paras Defence and Space Technologies (up 20%), Mazagoan Dock Shipbuilders (up 14.33%), Zen Technologies (up 8.54%), Ideaforge Technology (up 9.30%), Data Patterns (India) (up 7.36%), Garden Reach Shipbuilders & Engineers (up 5.63%), Bharat Dynamics (up 6.14%) and Cochin Shipyard (up 5.72%) surged.

DCX Systems surged 11.96% after the company announced that it has received orders worth Rs 32.20 crore from domestic and overseas customers.

Life Insurance Corporation (LIC) jumped 6.51% after the media reported that it would enter the health insurance biz through acquisitions.

Ambuja Cements added 1.90% after the company said it will acquire 100% stake in Penna Cement Industries (PCIL) for an enterprise value of Rs 10,422 crore.

Vodafone Idea (VIL) advanced 4.11% after the media reported that it would sell its entire stake in Indus Towers to repay debt.

Zydus Lifesciences added 1.89% after the drug major announced that it has received a tentative approval from the United States Food and Drug Administration (USFDA) to market Azilsartan Medoxomil and Chlorthalidone tablets.

National Aluminium Company added 3% after the company said that it has executed a mining lease deed with the State Government of Odisha for an area spread over 697.979 hectares for Bauxite Mines in Pottangi Tehsil, Koraput district.

Lemon Tree Hotels gained 3.63% after the company announced the opening of its ninth property in Rajasthan, Udaipur with Keys Lite by Lemon Tree Hotels.

Suven Pharmaceuticals rallied 7.49% after the company the signing of definitive agreements for acquiring 100% of equity shares of Sapala Organics.

Rites gained 3.74% after the firm signed a memorandum of understanding (MoU) with the Delhi Metro Rail Corporation (DMRC) for consulting on the projects related to metro rail system.

Techknowgreen Solutions gained 5.38% after the company announced that it has secured a work order worth Rs 2.06 crore from Maharashtra Pollution Control Board (MPCB).