Mumbai: India’s equity indices rose Friday in a relief rally, snapping a seven-day losing run, as traders cut some of their bearish bets, judging that the Reserve Bank of India’s monetary policy commentary was not as hawkish as expected. The Nifty closed above the 17,000 level, a key hurdle, opening the possibility of an upside of 2-3% in the near term, depending on the direction of global markets.The BSE Sensex closed at 57,426.92, up 1.8%. The Nifty advanced 1.6% to end at 17,094.35. The index closed above its 200-day moving average (DMA), a key long-term trend indicator, of 16,982. Shares of lenders and other rate-sensitive stocks led the rebound with the Nifty Bank index jumping 2.6%.Friday’s gains helped the benchmark indices claw back some of their recent losses. Both had fallen over 5% in the previous seven trading sessions till Thursday.”Investors need to be prepared for volatility because the markets are yet to bottom out,” said Nilesh Shah, managing director, Kotak Mahindra AMC. “Investors will seek clarity on the US Fed rates, geopolitical tensions, especially between Russia and Ukraine, and domestic factors of growth-inflation-currency depreciation.”94573893 Traders Cover Bearish Bets The market, which was trading marginally lower in early trade on Friday, picked up pace soon after the RBI policy announcement, which came as a breather for investors. Traders covered their bearish bets, which gave a fillip to the market.The Nifty took support near the 100-DMA level of 16,750 and witnessed a sharp pullback of over 360 points led by the outperformance of the Bank Nifty to reclaim its long-term moving averages, said Sudeep Shah, head, technical and derivatives research, SBICAP Securities.”If the index sustains above Friday’s session high of 17,187 and trades convincingly above this level then, there is a high probability that Friday’s lowest point of 16,748 would become a temporary bottom for the index and further upside up to the level of 17,325, followed by 17,450 level could happen,” said Shah.Foreign portfolio investors (FPIs) remained net sellers on Friday for the eight session on the trot. Overseas funds sold India shares to the tune of Rs 1,565.31 crore, as per provisional stock exchange data. In the previous seven sessions, foreign funds had sold Indian shares worth more than Rs 18,950 crore.Among other sector benchmarks, the BSE Realty index gained nearly 2% and the BSE Telecommunications index surged 3.5%.Across categories on the BSE, 2,254 stocks advanced, while 1,174 companies ended in the red.Kotak AMC’s Shah said Indian markets may appear expensive compared with emerging market peers on a one-year basis but they are cheap over the past five.The MSCI India Index trades at 18.66 times one-year forward price-to-earnings (P/E) compared with 10.12 times for the MSCI Emerging Market Index and 13.51 times for the MSCI World Index, Bloomberg data showed.”Investors need to maintain a neutral stance on asset allocation and should use the correction to accumulate quality stocks and build portfolios from a long-term perspective,” said Kotak’s Shah. “This is a market that is fairly valued when compared with India’s own historical valuations.”