Gains in Reliance Industries (RIL), automotive (auto) majors, and earnings optimism propelled the benchmark Sensex to new highs for a third consecutive day. Meanwhile, the Nifty finised at a new high for a second time in three days.
The S&P BSE Sensex ended the session at 74,743, marking a gain of 494 points, or 0.7 per cent, while the National Stock Exchange Nifty concluded at 22,666, up by 153 points, or 0.7 per cent.
RIL, which saw a rise of 1.75 per cent, contributed the most to the gains in both the Sensex and Nifty, followed by Larsen & Toubro, which increased by 1.9 per cent, and Mahindra & Mahindra, which rose by 3.2 per cent.
Analysts attribute the bullish sentiment in domestic equity markets to robust purchasing managers’ index numbers and other favourable macro data.
Additionally, hopes for economic and political stability are encouraging investors to adopt a longer-term perspective.
“After a stellar 2023-24, Indian equity markets continue to march into new territories. Expectations of a favourable outcome from the upcoming general elections and subsequent policy initiatives are bolstering sentiment. While the broader market is catching up, investors should exercise caution when venturing into the small and midcap space, conducting adequate due diligence,” said Dhiraj Relli, chief executive officer, HDFC Securities.
Despite rising bond yields and diminished expectations of interest-rate cuts due to resilient readings on the US economy, Indian equities witnessed gains.
Last week, US job numbers exceeded expectations for a fifth consecutive month, reinforcing the muddled outlook on rate cuts. With payrolls rising by the most in nearly a year and the unemployment rate dropping to 3.8 per cent, indications of a robust labour market driving economic growth emerged. Nonfarm payrolls in the US rose by 303,000 in March, the US Bureau of Labor Statistics reported on Friday.
In parallel, oil prices retreated from a five-month high following Israel’s announcement of troop withdrawals from Gaza. Nevertheless, crude oil continues to trade at elevated levels.
Brent crude on Monday was trading at $91.9, marking a decline of 0.45 per cent. Recent rallies in crude oil prices amidst geopolitical tensions and supply disruptions raise concerns for India, which largely relies on imports to meet its energy needs.
Looking ahead, the European Central Bank’s monetary policy announcement, release of Federal Open Market Committee minutes on Wednesday, global macro data, and quarterly earnings reports in India and abroad will shape market direction.
“The buoyant sentiment persisted, driven by sectoral tailwinds and expectations of fourth-quarter (Q4) earnings growth. The upswing was broad-based, with notable performance in auto, realty, oil and gas, and consumer discretionary sectors, while information technology (IT) showed tepid performance due to subdued Q4 growth expectations amid spending slowdown,” said Vinod Nair, head of research at Geojit Financial Services.
Market breadth exhibited mixed trends, with 2,033 stocks advancing and 1,898 declining. More than two-thirds of Sensex stocks recorded gains.
Foreign portfolio investors were net sellers, amounting to Rs 685 crore, while domestic institutions purchased shares worth Rs 3,471 crore.
Auto stocks saw the most rise, with their sectoral index on BSE gaining 1.7 per cent, whereas the BSE IT index declined by over half a per cent.
First Published: Apr 08 2024 | 8:27 PM IST
