Markets log biggest 1-day jump in over 4 months; RIL, ICICI lead charge

Three-month losing run ends; RIL, ICICI Bank lead charge

India’s benchmark indices witnessed their best day in more than four months on Friday with heavyweights such as Reliance Industries, ICICI Bank, and Infosys leading the charge.

The Sensex rose 1,031 points, or 1.8 per cent, to end at 58,991, while the Nifty50 index settled at 17,360 after gaining 279 points, or 1.6 per cent —the biggest gains for the two indices since November 11. Domestic institutional investors were buyers to the tune of Rs 2,480 crore, while foreign investors poured in Rs 358 crore.

Most equity markets in Asia and Europe ended higher, while the US markets were up in early trade.  

The sharp upmove on Friday helped the Indian markets snap a three-month losing streak. The Nifty managed to eke out a 0.3 per cent gain for the month, but a negative close would have meant the longest monthly losing run in 22 years. The index finished the March quarter with an over 4 per cent drop and the financial year (FY23) with a 0.6 per cent decline.

Sentiment got a boost after Morgan Stanley upgraded Indian equities to equal-weight, citing shrinking valuation premiums versus emerging-market (EM) peers as well as the resilient local economy.

“Indian markets played a catch-up rally with global markets, which had witnessed two consecutive days of strong move, when domestic markets were closed yesterday (Thursday) due to a holiday,” said Naveen Kulkarni, chief investment officer, Axis Securities PMS.

“Though we have seen a decent rally in the markets this week, we believe that markets may remain volatile in the near term, as the banking crisis in the US and Europe has not yet stabilised completely,” he added.

The Sensex and the Nifty gained about 2.5 per cent during the week, while the Nifty Smallcap index rose just 0.8 per cent.

Even after the latest upmove, the Indian markets are down nearly 8 per cent from their record highs in December. The correction has brought down the trailing 12-month Nifty valuations to 21, below their 10-year average of 22.4

“As valuations are a little cheaper than what they were a few months ago, the market is looking better,” said Jyotivardhan Jaipuria, founder of Valentis Advisors.

Some attributed Friday’s gains to a net asset value (NAV) management—a theory that markets see a sudden spike in March in order to boost yearly returns of mutual funds and other asset managers.

“Today being the fiscal year end, there will be some NAV adjustments. And there must have been some buying on that account,” said U R Bhat, co-founder of Alphaniti Fintech.

An analysis of last day performance for the last 12 financial years shows a mixed-bag performance, with the Nifty gaining more than 1 per cent only on three occasions.

The market breadth was favourable on Friday, with 2,382 stocks advancing and 1,189 declining. Four-fifths of Sensex stocks gained. RIL gained the most at 4.3 per cent, while Infoys and ICICI Bank rose over 3 per cent. All the sectoral indices gained. The IT index gained the most at 2.5 per cent. The India VIX index cooled 5 per cent to below 13.