Indian equity benchmarks reversed losses from earlier Thursday to extend their winning streak to the fifth straight session, defying a broader global stocks sell-off as investors worried that aggressive monetary policy and high inflation would lead to a global economic slowdown.
Bouncing back from its early fall, the BSE Sensex index rose 95.71 points, or 0.16 per cent, to end at 59,202.90, and the broader NSE Nifty index advanced 51.70 points, or 0.3 per cent, to 17,563.95, extending their rally for the fifth straight session.
HCL Technologies, Tech Mahindra, NTPC, PowerGrid, Bajaj Finserv, Nestle, Bharti Airtel, Tata Consultancy Services, and Infosys were among the top performers from the Sensex pack.
However, Asian Paints, UltraTech Cement, HDFC Bank, Titan, and Axis Bank also had declines, with IndusInd Bank experiencing the worst drop of over 4.5 per cent.
But, Thursday saw a decline in world stocks and a rise in bond yields as upcoming central bank rate meetings cast a doubt on recent, mainly robust corporate profits that haven't been able to turn around pessimistic investor mood beyond a relief rally in recent sessions.
The MSCI all country stock index fell 0.2 per cent, extending to its 25 per cent decline so far this year, wiping out the gains made in 2021.
The risk-off sentiment led to a decline in Asian stock markets on Thursday, with the MSCI's broadest index of Asia-Pacific shares outside Japan falling to more than two-year low as the US 10-year Treasury yield touched a fresh 14-year high, brushing off a weak housing report.
The STOXX index of 600 businesses in Europe fell 0.5 per cent, or nearly 20 per cent for the year, as concerns about an economic downturn were stoked by BE Semiconductor's and Nokia's disappointing earnings.
"There is a concern the economy over the course of the next 12 months are going to be extraordinarily difficult, with the mood slightly pessimistic when it comes to corporate earnings," Mike Hewson, Chief Markets Analyst at CMC Markets, told Reuters.
US futures fell after Wall Street broke a two-day winning streak on Wednesday, making expectations for a bottom appear improbable.
The third-quarter results season has gotten off to a solid start, which has improved investor optimism.
Investors must, however, strike a balance between encouraging signals of business resiliency and worries about the effects of sustained inflation, hawkish actions by the Federal Reserve and other central banks, and economic concerns.
“I think the market now is looking at 2023 and baking some kind of mild downturn into the price,” Hugh Gimber, Global Market Strategist at JPMorgan Asset Management, said on Bloomberg Television.
“The key is that inflation number coming down, because if it does, 5 per cent for the Fed looks to me roughly as the right figure and then the market can have a clearer picture.”