Benchmarks surge as RIL, IT stocks shine

Equity indices extended their winning streak to a third straight session on Monday, tracking firm cues from global markets. Both Sensex and Nifty surged nearly 2% on Monday, propelled by buying in heavyweight Reliance Industries and IT stocks. Analysts said that the bounce-back in the Indian markets was due after its underperformance since April 2022. Since April 1, both Sensex and Nifty have declined about 5% each.

After rallying 1,198 points intra-day, the Sensex settled 1,041 points or 1.9% higher at 55,925.74, and the broader Nifty-50 ended higher by 308.95 points or 1.9% at 16,661.40.

Amid Monday’s rally, investor wealth reflected by the total market capitalisation of all BSE-listed companies surged by `5.33 trillion. In the last three days, it has surged over `10.2 trillion.

“While fears of global recession and further rise in oil prices lurk, investors are currently engaged in buying after the recent free fall. Technically, in the last three days, the Nifty has rallied nearly 800 points and cleared the 16400 resistance level, which is broadly positive. For traders, 16500 would be the trend decider level, above which the positive momentum is likely to continue till 16750-16800,” Shrikant Chouhan, head of equity research (retail) at Kotak Securities, said.

A decline in the dollar index and the US 10-year bond yields, too, remain key positives for all emerging markets, including India, analysts added. While the dollar index slipped to 101 levels after hitting 104.85 on May 12, the yield on benchmark treasury yield cooled off to 2.74%.

Foreign portfolio investors turned net buyers on Monday after a long selling spree. According to provisional data available on the exchanges, FPIs bought shares worth $64.75 million, while local institutional investors bought shares worth $196.6 million. So far this month, FPIs have sold shares worth about $5 billion, the highest single-month selling since February 2022, Bloomberg data show.

Elsewhere in Asia, too, markets in Shanghai, Japan, and Hong Kong ended higher after China eased some of the Covid-19 restrictions on business activity. Hang Seng and Nikkei 222 ended higher by 2% each on Monday.

Back home, all 15 sectoral gauges compiled by the NSE ended in the green, with the Nifty Realty, IT and Consumer Durables being the top performers, gaining about 4% each. Among the Sensex stocks, Titan, M&M, and Infosys were the top gainers, up over 4.5% each. Overall, out of the 3,615 stocks traded on the BSE, 2,332 advanced.