India's benchmark indexes bounced back after a two-session drop on Thursday, led by financials on strong business updates and energy stocks on investment plans.
The blue-chips NSE Nifty 50 index climbed 0.66% to 21,658.60 points, while the S&P BSE Sensex added 0.69% to 71,847.57 points.
"Expect markets to witness consolidation in the next four to five sessions ahead of results as investors await earnings to match up to expensive valuations," said Narendra Solanki, head of fundamental research of investment services at Anand Rathi Shares and Stock Brokers.
While investors still expect three U.S. interest rate cuts after the Federal Reserve minutes, a likely delay in the onset of rate cuts could trigger consolidation across global markets, Solanki said.
Financials led the gains in the Nifty, adding 1.22%.
Non-bank lender Bajaj Finance jumped 4.34%, while IndusInd Bank added about 3% on strong quarterly business updates.
The energy index gained 1.18%, led by a 3.56% surge in power producer NTPC.
The company proposed a total of $19.20 billion worth of investments in Gujarat state for projects including energy parks.
The more domestically inclined Nifty small- and mid-caps outperformed the benchmarks, gaining 0.99% and 1.68% each on the day.
"Only if the earnings of small- and mid-caps remain strong, these expensive valuations could sustain," said Solanki.
Realty companies extended their record rally for a fourth straight session, adding 6.76%, their best day since September 2021.
Property consultant Knight Frank Research said that sales momentum in the sector will likely remain robust in 2024, after Indian real estate developers recorded all-time high sales and launches of residential units in the second-half of 2023.
Meanwhile, shares of state-owned oil marketing companies, Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp lost between 1% and 2% after CLSA cut ratings to "sell" from "buy", citing valuation worries after a recent rally.
