Substantial support from the influential Reliance Industries Limited (RIL) fueled the market surge, driving the index higher. The positive momentum was further reinforced by global markets trading on an optimistic note," stated Om Mehra, Technical Analyst at SAMCO Securities.
Prashanth Tapse, Senior Vice-President (Research) at Mehta Equities Ltd, remarked that while the markets closed in positive territory, the recovery in banking stocks played a pivotal role. These stocks had faced significant declines in recent sessions due to mixed earnings in the financial sector and central banks delaying rate cuts.
During the Tuesday trading session, Reliance Industries Ltd (RIL) achieved a historic milestone by becoming the first Indian company to surpass a market capitalization of Rs 20 lakh crore. The benchmark Sensex gained 0.68%, or 483 points, reaching 71,555.19, while the NSE Nifty rose by 127 points to 21,743.25. RIL's stock surged to a 52-week high of Rs 2,958 before closing at Rs 2,928.95, with a market capitalization of Rs 19.81 lakh crore at the close.
Market participants witnessed a rebound in the Nifty following Monday's losses, spurred by India's Consumer Price Index (CPI) inflation hitting a three-month low of 5.10%. All sectors ended in positive territory, except metals, with banking and financial services leading the gains. Public sector undertakings (PSU) shares bounced back after experiencing profit booking in the preceding sessions.
Om Mehra emphasized the noteworthy support from RIL as a driving force behind the market rally. Additionally, the MSCI Global Standard Index underwent a quarterly rejig on Tuesday, potentially attracting nearly $1 billion in inflows from passive foreign institutional investors (FII) funds. Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial, highlighted specific stocks in focus post the MSCI review, including NMDC, GMR Airports, Union Bank, BHEL, and Punjab National Bank.
Prashanth Tapse reiterated that although the markets closed positively, the recovery in banking stocks was instrumental. He also pointed out that volatility is expected to persist due to ongoing challenges such as geopolitical concerns, stretched valuations of local stocks, and continued FII selling, which may keep investors cautious.
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