Heavyweights do heavy lifting: RIL, ICICI Bank spur indices to new highs

The Sensex ended the session at 78,674, gaining 621 points or 0.8 per cent, while the Nifty 50 index ended at 23,869, up 147 points or 0.6 per cent

A sharp rally in the shares of Reliance Industries (RIL), the country’s most-valuable firm, propelled the markets to fresh highs on Wednesday.

The up move was also supported by sustained gains in private sector banks and buying by foreign portfolio investors (FPIs).

The Sensex ended the session at 78,674, gaining 621 points or 0.8 per cent, while the Nifty 50 closed at 23,869, up 147 points or 0.6 per cent.

Both the indices ended at fresh record highs for the ninth time this month.

Given the strong upward momentum, experts believe it is only a matter of days before the Sensex and Nifty will hit the 80,000 and 24,000 milestones, respectively.

On a month-to-date basis, both indices have gained 6 per cent, and are on course to post their best monthly gains since December 2023.

The broader markets have outperformed this month with the Nifty Smallcap 100 index gaining 9.5 per cent and the Nifty Midcap 100 rising almost 7 per cent.

Shares of RIL rose 4.1 per cent to end at a new record of Rs 3,027.4, valuing the Mukesh Ambani firm at Rs 20.5 trillion.

RIL, which has the second-highest weight in both the Sensex and Nifty, accounted for more than half the gains made on Wednesday. Other top contributors were ICICI Bank, Bharti Airtel and Axis Bank — all touching new record highs.

Market players said the gains were on account of strong buying of blue chip stocks.

Optimism of big bang announcements during RIL’s forthcoming annual general meeting (AGM) also underpinned gains. The gains in telecom majors were based on expectations of tariff hikes.

“The domestic market hit a new peak, bolstered by a rally in largecap stocks, where the valuation is relatively fair. In contrast, mid and smallcap stocks saw profit-taking due to valuation concerns. Currently, financials and consumption stocks are catching up, driven by improved balance sheets, a strong GDP growth forecast, and softening inflation. Global market sentiment reflected similar trends, with a consensus on imminent rate cuts,” said Vinod Nair, head of research at Geojit Financial Services.

Better macroeconomic indicators have also boosted sentiment, with the current account data for the March quarter showing India had posted a current account surplus for the first time in 10 quarters.

“Selective heavyweights have been driving the index gains, with Reliance making a significant impact. We anticipate some volatility on Thursday due to the scheduled monthly expiry of June derivatives contracts. Despite this, we reiterate our recommendation to continue with the ‘buy-on-dips’ strategy, focusing on specific sectors and themes for stock selection,” said Ajit Mishra, senior vice-president of research, Religare Broking.

Analysts said that there will be continued support from both retail and institutional investors. The market breadth was mixed, with 1,960 stocks declining against 1,922 advances.

Going forward, the Union Budget and the results season will determine the market trajectory.