Indian equity benchmarks rose on Wednesday amid gains in Reliance Industries (RIL), even as the market breadth remained weak. The S&P BSE Sensex ended the session at 72,996, gaining 526 points, or 0.73 per cent, while the National Stock Exchange Nifty 50 rose 119 points, or 0.54 per cent, to end the session at 22,124.
The broader market indices underperformed, with the Nifty Midcap 100 gaining 0.1 per cent and the Nifty Midcap 50 losing 0.1 per cent. The beaten-down Nifty Smallcap 100 rose nearly 1 per cent. On the BSE, 1,471 stocks advanced, while 2,381 fell.
RIL rose 3.6 per cent to close at Rs 2,984, becoming both the biggest gainer and the biggest contributor to the Sensex and Nifty gains. The stock rose after Goldman Sachs came out with a report giving a target price of Rs 3,400.
In its note, Goldman Sachs said RIL’s consolidated returns are at an inflection point in 2023-24, and cash return on capital invested will expand by 270 basis points to 12 per cent in 2026-27, the highest since 2011.
HDFC Bank, Larsen & Toubro, and Maruti Suzuki India were the other big contributors to the index gains.
“Stock-specific actions and positive undercurrents due to a healthy economic growth forecast led the market towards a positive closure. However, due to the holiday-led truncated week, investors are now focusing on the US gross domestic product data and next week’s Reserve Bank of India policy announcement to gauge market direction. The small and midcap space is outperforming lately as investors have bargaining opportunities, but volumes are low,” said Vinod Nair, head of research at Geojit Financial Services.
Equity investors have been more optimistic since last week, as there has been greater clarity on the path to lower interest rates by the US Federal Reserve (Fed).
Last week, the Fed kept the rates unchanged in a range of 5.25 per cent to 5.5 per cent, the highest since 2001, for a fifth straight meeting. But it kept its outlook for three rate cuts this year. There were doubts about the outlook of rate cuts after the recent inflation. However, Fed Chair Jerome Powell stressed that the Fed officials would like to see more evidence that inflation is headed toward its 2 per cent goal before they can start reducing rates this year.
Corporate earnings announcements from next month and election-related news flow will determine the market trajectory in the near term.
“With the monthly derivatives expiry and financial year-end, more volatility could be seen. Moreover, many global economic data are expected this week, which could further add to the uncertainty,” said Siddhartha Khemka, head of retail research of Motilal Oswal Financial Services.
Foreign portfolio investors (FPIs) were net buyers to the tune of Rs 2,170 crore, and domestic institutions bought Rs 1,197 crore. This month’s FPI buying tally has crossed Rs 30,000 crore underpinned by large block deals in companies such as ITC, Tata Consultancy Services, and InterGlobe Enterprises.
Real estate and capital goods stocks outperformed with their sectoral gauges rallying around 1 per cent each. Stocks impacted by the Nifty rebalancing were also in focus.
Shriram Finance, which gets added to the Nifty, rose as much as 2.3 per cent. Meanwhile, UPL, which will be removed from the index, fell 2 per cent.
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First Published: Mar 27 2024 | 7:17 PM IST
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