US optimism brings cheer to Dalal Street

US optimism brings cheer to Dalal Street

Indian equities saw a sharp revival in fortunes on Monday, with the indices staging a strong comeback after a 1% reversal on Friday.

Optimism stemming from the US’s strong jobs data triggered the rally on a day auto, realty, and financials witnessed heavy buying interest.

“Heavy buying by FIIs has given a fillip to the indices. India is an outlier compared to other EMs as economic activity is strong and finances have been managed quite well,” said U R Bhat, co-founder and director at Alphaniti Fintech. He pointed out that the HDFC twins were oversold on Friday, which led to investors buying on dips as the fundamentals remain strong. 

Both FIIs and DIIs were net buyers. FIIs pumped in Rs 2,123.76 crore, while DIIs bought to the tune of Rs 245.27 crore.

With the Nifty breaching 18,100, there is a strong case for an upside of 18,500 in the near term, according to Chandan Taparia, head (Technical & Derivatives Research), Motilal Oswal, who said the markets could see the momentum sustain for the week.

Market breath was positive, with 1,998 BSE stocks advancing to 1,654 declining. Investor wealth saw an addition of `2.28 trillion on Monday, taking the BSE market cap to Rs 276 trillion.

Market Graph

IndusInd Bank led the pack with a near 5% gain. The Bajaj twins gained in the 3-4% range. Kotak Bank, Axis Bank, SBI, ICICI Bank, and the HDFC twins all posted gains of over 1%.

Movement in heavyweight counters also propelled the index. Reliance Industries gained 1.2% while TCS rose 0.6%. Sun Pharma, Nestle, and L&T were the only laggards, shedding less than 1% each.

“Overall breath in the Indian markets has improved thanks to the return of FII money. Valuations have corrected to reasonable levels, which is generating strong interest,” said A Balasubramanian, MD and CEO of Aditya Birla Sun Life AMC. He added that the momentum in the market is strong, given that most sectors saw a decent earnings and surpassed expectations. 

The BSE Auto jumped 1.71% — the highest among sectoral indices. Tata Motors was the biggest gainer in the auto pack at 4.82%. Bajaj, Maruti, and M&M gained over 1.5% each, while TVS, Eicher, and Hero also rose over 1% each.

IndusInd Bank also led gains among the Nifty pack, zooming over 5%, while Tata Motors gained close to 5%. Coal India and Adani Enterprises were the biggest laggards, down 1.83% and 1.47%, respectively.

The Bank Nifty was up 1.46%, with the private bank index also up 1.7%. However, the Nifty PSU bank index dipped 0.93%, with majority of the PSU banks closing in the red. Bank of India shed close to 5.7%, while Indian Bank shed 4.85%.