The benchmark indices rose over 1.7 per cent on Monday, tracking gains among Asian peers and on the back of a rally in shares of Reliance Industries.
The mood was buoyant following a stimulus announcement from China and hopes of a favourable Union Budget. The US data raised hopes of early interest rate cuts by the Federal Reserve.
The Sensex jumped 1,240 points or 1.76 per cent to settle at 71,941. The Nifty climbed 385 points or 1.80 per cent to 21,737, its biggest single-day gain since December 4. The broader markets as measured by Nifty Midcap100 and Nifty Smallcap 100 was up 1.5 per cent each.
Top 2 performers
Reliance Industries and ONGC were the top two Nifty performers, gaining over 7 per cent each. RIL shares jumped to a record on optimism that the disruption caused by the Red Sea crisis will increase margins on some oil products in Asia. Reliance benefits from higher refining profits in the region as it exports a bulk of its production, according to reports.
Energy stocks rallied as crude oil prices climbed back above $80 due to supply concerns following Houthis continuous strike in the Red Sea and high power demand. Most sectors ended in green, with PSUs, Energy, PSU Banks and Infra the major gainers.
Domestic institutions bought shares worth ₹3,222 crore, while FPIs were marginal buyers of shares worth ₹110 crore.
Vinod Nair, Head of Research, Geojit Financial Services, said, “The domestic market saw an uptick as the recent selloff and positive Asian peers provided an opportunity to accumulate quality stocks. Despite premium valuations, confidence was high among investors due to the optimistic environment surrounding the interim budget and recent set of results aligning with forecasts. Globally, the upcoming FED policy stands out as a crucial factor. While a rate cut by the FOMC is unlikely, investors will eagerly monitor their commentary to get cues on future rate paths.”
Asian stocks
Asian stocks started the week mostly higher, as new steps by Beijing to stabilise the local market outweighed the drag on sentiment from the liquidation of property giant China Evergrande. Kospi and Nikkei 225 rose 0.89 per cent and 0.77 per cent, respectively. European indices were trading in the red.
Nifty formed a long bull candle on Monday. 21851-21970 could be the next resistance band for the Nifty while 21482 could act as a support. “Build-up ahead of the vote on account seems to have started. This upmove can be used for selectively reducing weight in individual stocks that have run up too fast,” said Deepak Jasani, Head-Retail Research, HDFC Securities.