Sensex, Nifty rise for second day as RIL, metal stocks drive gains

Indian equities concluded a turbulent session on Thursday with gains of nearly a per cent, driven by buying at beaten-down levels across the board. A decline in the US dollar and crude oil prices further bolstered investor sentiment.

 

After fluctuating by 975 points, the benchmark Sensex closed at 74,340, up 610 points or 0.8 per cent. The Nifty ended at 22,544.7, gaining 207.4 points or 0.93 per cent. Both indices recorded gains for the second consecutive session, with the Nifty emerging from its longest-ever 10-day losing streak and levels last seen nine months ago.

 

Over the last two sessions, the Sensex gained 1.85 per cent and the Nifty rose by 2.1 per cent. The total market capitalisation of the BSE-listed firms reached ₹398 trillion after a rise of ₹13.6 trillion over the last three sessions.

 

 

The gains over the last two days are attributed to bargain hunting, following a recent selloff. Indian equities have faced a downturn over the past five months due to concerns over elevated valuations, weakening corporate profits, and persistent foreign portfolio investor (FPI) outflows.

 

“I was expecting the market to bottom out by the end of March, but the fall was brutal. The Indian market paid for the frothy valuations, and there are pockets with attractive valuations now. There might be some turbulence going ahead, but the market will be in recovery mode," said Chokkalingam G, founder of Equinomics. 

 

Reliance Industries, which has the second-highest weight in the benchmark indices, accounted for nearly a third of the gains. Its shares rose 3 per cent after positive reports from several brokerages. Kotak Institutional Equities noted that with significant corrections, the risk-reward profile for Reliance Industries is now more favourable. The brokerage expects the retail business to improve in the next few quarters, with potential catalysts including timelines for the telecom business IPO and another tariff hike.

 

A 3.2 per cent drop in the dollar index to 104.1 on Thursday led to buying in high beta sectors like metals. The Nifty Metal index rose 2.34 per cent, extending its two-day run to over 6 per cent. Jindal Stainless and Hindustan Zinc were the top gainers in the metal index, logging gains of nearly 6 per cent and 4 per cent, respectively.

 

The decline in Brent crude oil prices by 4.6 per cent during the week also buoyed sentiment. Lower crude prices are beneficial for India, as oil forms a significant portion of its imports. Asian Paints, for whom crude is a key input, rose 4.6 per cent, and was the top gainer both on the Sensex and the Nifty. Oil marketing companies also posted strong gains.

 

US President Donald Trump's exemption of auto manufacturing companies from 25 per cent tariffs on Canada and Mexico for one month eased trade tensions.

 

"Positive global cues drove market optimism as US President Trump exempted auto manufacturing companies from 25 per cent tariffs on Canada and Mexico for one month, easing trade tensions to some extent," said Siddhartha Khemka, head of research, wealth management of Motilal Oswal Financial Services.

 

The market breadth was strong, with 3,006 stocks advancing and 990 declining. Axis Bank, which rose 1.9 per cent, and NTPC, which rose 3.4 per cent, were other key contributors to the gains.