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Bluechip companies lift benchmark indices after three days of losses

RIL, L&T, ITC account for bulk of the gains

Stock market

Representative Image (Photo: Bloomberg)

Sundar Sethuraman Mumbai

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The benchmark indices snapped their three-day losing streak on the back of gains in index heavyweights Reliance Industries Limited (RIL), Larsen & Toubro (L&T) and ITC.

Most global markets traded with caution ahead of the monetary policy decision by the US Federal Reserve (Fed). The Sensex also pared nearly 200 points of gains from the day’s high of 66,897. The index ended the session at 66,707, a gain of 351 points or 0.5 per cent. The Nifty50 ended the session at 19,778, gaining 97 points or 0.5 per cent. The India Vix index rose 2.1 per cent to 10.46.

Analysts said that ahead of the crucial Fed announcement, most traders shifted focus to stock-specific action.

RIL rose 1.8 per cent and made a 124-point contribution to index gains. Shares of the oil-to-retail conglomerate rose after news reports suggested that Qatar's sovereign wealth fund is in talks to buy a minority stake in the group's retail arm.

According to reports, the Qatar Investment Authority is considering a $1-billion investment in Reliance Retail Ventures for a stake of about 1 per cent, valuing the business at around $100 billion.

Also on Wednesday, L&T rose 3.3 per cent and was the best-performing stock and the second-biggest contributor to the Sensex gains. Its shares finished at a new record on the back of strong quarterly results and Rs 10,000-crore share buyback announcement. L&T reported a 46.5 per cent year-on-year rise in net profit for the June quarter of the 2023-24 financial year (Q1FY24), beating estimates on the back of improved operational performance and higher other income. The company's order book also crossed the Rs 4 trillion mark for the first time.

Shares of ITC recovered after a three-day losing streak and rose 2.14 per cent. The stock fell nearly 6 per cent in the last three sessions after announcing plans to spin off its hotel business.

Buying by foreign portfolio investors (FPIs) also helped boost sentiment. FPIs bought shares worth Rs 923 crore, while the domestic institutional investors were net buyers to the tune of Rs 470 crore.

The investor wealth on the BSE rose by Rs 1.3 lakh crore on Wednesday.

The market breadth was favourable, with 1,839 stocks advancing and 1,708 declining on the BSE. Telecom stocks gained the most, and their index on BSE rose 2.3 per cent.

Analysts said that the market is witnessing buying at lower levels after three days of consolidation.

Ajit Mishra, senior vice president, technical research, Religare Broking, said that Wednesday's bounce back shows that the bulls are not in the mood to loosen their grip, citing significant support around the 19,300-19,500 zone.

"However, any negative surprise from the global front might result in extended consolidation. Meanwhile, traders focus on sectors showing higher relative strength and pre plan their exits."

Infosys, which rose 1.07 per cent, Axis Bank, which rose 1.5 per cent, and Kotak Mahindra Bank, which rose 1.1 per cent were the other big contributors to index gains.

"The earnings season will pick up pace in the coming days. While companies in the IT sector reported decent order wins, revenue has remained under pressure due to client spending cuts. Consumption expenditure remains muted due to elevated price levels. Investors will follow the management commentary and monitor macroeconomic data for further cues," said Vikas Jain, senior research analyst at Reliance Securities.


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First Published: Jul 26 2023 | 9:22 PM IST

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