Markets rally as global sentiment improves; Sensex, Nifty rise 1.2%

Indian markets gained on Thursday, along with global peers, as investor sentiment improved on optimism that the Covid-19 situation in China may not be as bad as feared. Investors also cheered strong earnings from Meta Platforms, leading to a bounce in technology stocks. Back home, solid numbers posted by Hindustan Unilever (HUL) triggered a surge in consumer goods stocks.

The Sensex rose 702 points, or 1.2 per cent, to close at 57,521, while the Nifty50 index ended at 17,245 with a gain of 206 points. Heavyweights like Reliance Industries (RIL), HUL, Infosys, and ICICI Bank accounted for the bulk of the index gains. HUL was the top gainer on both the indices, with the stock surging about 4.5 per cent. RIL, meanwhile, rose 1.5 per cent to end at a new high of Rs 2,819.  

“There were fears that margins of FMCG companies would be hit due to inflation. However, HUL's results dispelled those fears,” said U R Bhat, founder, Alphaniti Fintech. 

The markets have had a roller-coaster week as investors are fretting about the Covid situation in China, the Russia-Ukraine war, and the possibility of aggressive monetary tightening by the US Federal Reserve. However, global markets shrugged off some of these concerns as upbeat earnings helped investors look past growth fears. While Meta’s earnings have boosted sentiment, investors were eyeing results from Apple, Amazon, and Twitter.

Last week, Federal Reserve Chair Jerome Powell had hinted that a 50-basis point interest rate hike in May and another 50 bps increase in June were on the cards to tame the hottest inflation in over four decades. Central banks across the globe have been prioritising fighting inflation after consumer prices hit multi-year highs.

The rising inflation, supply-side bottlenecks, and geopolitical tensions have led to questions about the revival of the global economy and triggered sharp volatility in equity markets. The Brent crude traded around $105 a barrel on Thursday. Crude oil prices have come down from the highs of last month amid rising Covid cases in China.

"We're mirroring global counterparts at large, and domestic earnings add to the choppiness. Sectors like auto, FMCG, and energy show resilience and keep the participants occupied," said Ajit Mishra, VP of research, Religare Broking.

Both foreign portfolio investors (FPIs) as well as domestic institutions were net buyers on Thursday. FPIs purchased shares worth Rs 743 crore, while the latter pumped in Rs 781 crore.

In April, FPIs have sold shares worth Rs 19,034 crore, according to data from NSDL. Experts said equity markets were likely to remain volatile until FPI outflows reverse in a meaningful way.

"The next batch of Q4 results and management commentary, global stock market trends, and the movement of the rupee and crude oil prices are likely to guide market sentiment in the near future. Moreover, the ongoing Russia-Ukraine crisis and sanctioning of Russian products would have high negative bearings on global and Indian equities,” said Mitul Shah, head of research, Reliance Securities.

The market breadth was weak, with 1,788 stocks declining and 1,621 advancing on the BSE. Barring one, all the sectoral indices on the BSE gained. FMCG stocks gained the most, and its sectoral index rose 2.08 per cent.

RIL m-cap tops $250 billion

The market capitalisation (m-cap) of Reliance Industries (RIL) crossed the $250-billion mark on Thursday — the first Indian company to achieve the milestone. 

In local currency terms, the oil-to-telecom conglomerate has a market cap of Rs 19.07 trillion, making it the most-valued firm in India. 

The firm is currently the 34th most-valued firm globally. Shares of the company closed at a record high of Rs 2,819, up 1.5 per cent. RIL stock has gained 17 per cent so far this year, outperforming the benchmark Nifty, which is down 2.2 per cent.