IT, financials lead Sensex rally, boosting investor wealth by Rs 4 lakh crore

Following gains in global markets, Indian equity indices closed higher on Monday led by IT and financial stocks, while falling crude prices provided support to oil marketing companies.

The 30-share BSE benchmark Sensex surged 560 points or 0.77% to settle at 73,649. Meanwhile, the broader NSE Nifty gained 189 points or 0.86% to close at 22,336.

ICICI Bank, L&T, Infosys, Axis Bank, Reliance Industries, SBI, and Bajaj Finance emerged as the top Sensex contributors, driving the index higher. Conversely, HDFC Bank and NTPC weighed on the index.

Among individual stocks, Persistent Systems fell nearly 10% despite the company reporting an inline Q4 net profit. However, brokerages noted that the stock was trading at a premium valuation compared to its peers.

Sterling and Wilson Renewable Energy stock ended at 10% upper circuit after it posted revenue growth of over 50% at Rs 3,035 crore while it also turned EBITDA positive at Rs 54 crore in FY24 aided by growing Domestic EPC business.

All sectoral indices closed higher on Monday, with Nifty PSU Bank emerging as the top gainer, rising over 3%. Additionally, Nifty Consumer Durables, Healthcare, Pharma, Auto, Financial Services, FMCG, and Realty also closed 0.7% to 2.4% higher.

The market capitalisation of all listed companies on BSE surged by Rs 4.52 lakh crore to Rs 397.97 lakh crore. The market breadth was skewed in favour of the bulls. About 2,619 stocks gained, 1,285 declined, and 153 remained unchanged on the BSE.

Expert Views

"The Indian market extended last Friday's relief rally as Middle East tension saw some respite, though the situation remains fluid. The recovery was broad-based across sectors, with renewed interest in mid- and small caps," said Vinod Nair, Head of Research, Geojit Financial Services.

"The prevailing higher interest rate environment is expected to persist longer than expected which, along with the moderating earnings growth, suggests a continuation of the consolidation in the near-term," Nair said.

Rupak De, Senior Technical Analyst at LKP Securities, said, "Bulls continued to dominate the market as the Nifty gained for the second consecutive session. The trend has turned positive after reclaiming a critical near-term moving average. Sentiment is expected to remain favorable for bulls as long as it stays above 22,150. On the upside, the index could potentially move towards 22,600-22,700. Conversely, a drop below 22,150 could lead to consolidation in the index."

Global Markets

World stocks recovered some losses on Monday, and bonds, oil and gold dipped as investors reversed some of their more defensive positions taken going into the weekend on fears of a wider Middle East conflict.

The STOXX 600 was up 0.25%, and S&P 500 futures 0.36% higher after MSCI's broadest index of Asia Pacific shares outside Japan rose 0.8%.

London's commodities-heavy FTSE100 rose around 1% the biggest gainer among large European benchmarks, as tin and nickel rose to new multi-month highs.

Crude Oil

Oil prices fell by over 1% on Monday, as the market focus switched to fundamentals. Brent futures fell $1.21, or 1.4%, to $86.08 a barrel. The front-month U.S. West Texas Intermediate (WTI) crude contract for May, which expires on Monday, fell 97 cents, or 1.2%, to $82.17 a barrel, while the more active June contract dropped $1.23 to $80.99 a barrel.

Rupee Ends Higher

The Indian rupee rose on Monday aided by likely equity inflows and dollar sales from state-run banks. The rupee closed at 83.3625 against the U.S. dollar, up 0.1% from its close at 83.47 in the previous session.

(With inputs from agencies)