Banking stocks, Reliance Industries keep indices' winning streak on course

The benchmark indices staged a strong recovery after opening in the red and ended Tuesday’s session at all-time highs on the back of gains in index heavyweight Reliance Industries and banking stocks.

The benchmark Sensex ended the session at 49,517, a gain of 247 points or 0.5 per cent. The Nifty rose 78 points or 0.5 per cent to end the session at 14,563.

The markets fell initially after the Reserve Bank of India (RBI) mentioned the disconnect between the economy and the stock markets. The central bank said this poses risks to the country’s financial stability. RBI made these observations in its financial stability report published on Monday and warned of doubling of non-performing assets by September 2021.

However, the gain in the index heavyweights saved the day. The continuing optimism regarding the positive start to the earnings season and the imminent roll-out of Covid-19 vaccination in India also cheered investors, who are betting that this will accelerate economic recovery.

“A majority of sectors traded in the green in anticipation of good quarterly result, while pharma and FMCG experienced some selling. US bond yields have changed trajectory to a rising trend, which could impact emerging markets (EMs) in the future. But foreign institutional investor (FII) inflows are strong and the dollar continues to be weak due to oversupply, led by the high amount of fiscal stimulus,” said Vinod Nair, head of research, Geojit Financial Services.

The mood in global markets was somewhat mixed as investors weighed the consequences of the rise in treasury yields and elevated valuations. Concerns persist about markets reaching highs when economic activity has been disrupted. 

“Markets will react to the macroeconomic data in early trade on Wednesday. Further, earnings announcements from IT majors such as Infosys and Wipro will be on participants’ radar. We advise participants to align their positions according to the trend, but strictly avoid overleveraging at current levels,” said Ajit Mishra, vice-president (research), Religare Broking.

On Tuesday, 387 stocks hit their 52-week highs, and 419 were locked in the upper circuit on the Sensex. Market breadth was positive with total advancing stocks at 1,664 and those declining at 1,435. 

Half the Sensex components ended with gains. 

SBI was the best-performing stock; Airtel and RIL rose 3.4 and 3.14 per cent, respectively. 

Telecom and realty stocks rose the most, and their gauges rose 2.85 per cent and 2.84 per cent, respectively.

Foreign portfolio investors (FPIs) were net buyers to the tune of Rs 571 crore, and domestic institutional investors sold shares worth Rs 1,334 crore.

M-cap of BSE-listed firms at fresh high

The market capitalisation (m-cap) of all BSE-listed entities jumped to an all-time high of Rs 197.46 trillion on Tuesday, driven by the bullish market sentiment. At the close of trade, the m-cap of all BSE-listed firms stood at Rs 1,97,46,939.57 crore ($2.6 trillion).

“Domestic equities remained firm, recovering sharply from the day’s low and recorded fresh highs. We believe fundamentals of the market remain intact considering sustained rebound in economic activity,” said Binod Modi, head  of strategy at Reliance Securities. PTI