RIL, IT stocks drive Sensex, Nifty to near 4-month highs

Mumbai: Firm global markets cues following upbeat data from the US and China helped BSE barometer Sensex to close near four-month highs on Friday with index heavyweight Reliance Industries (RIL) and the IT stocks contributing the most to the gains, although surging coronavirus cases in the country and the world, kept the gains in check. This was the third straight day of gains from benchmarks Sensex and Nifty.

“The benchmark indices ended with a gain of 2.4%, on a weekly basis, as optimism about a continued recovery in economic activity offset the concerns raised by an unabated rise in virus infections,” said Vinod Nair, Head of Research at Geojit Financial Services.

However, Nair warned that any extension or resetting of lockdown measures, due to increasing infections, could negate the gains and advised investors to exercise caution.

“In spite of improving economic data, markets are still largely moving on hope rather than on any real change in the ground realities. With intraday volatility increasing, investors are advised to remain cautious,” he said.

Benchmark Sensex added 178 points to close the rangebound session at 36,021, while peer Nifty added 56 points to settle at 10,607. It was the highest close since March 6 for both the indices.


The indices gained for the third straight week and advanced 2.4 per cent and 2.1 per cent, respectively during the week.

As many as 19 0f 30 Sensex stocks closed higher. RIL was the top contributor to Sensex’s gains as it advanced 1.49 per cent, cheering another cheque for its subsidiary Jio Platforms.

US semiconductor giant Intel will invest Rs 1,894.50 crore in Jio Platforms for a 0.39 per cent stake. The cheque took the total investment amount in Reliance's digital arm to Rs 117,588.45 crore since April 22.

Telecom major Bharti Airtel followed next with a 4.05 per cent rise. Software giants Tata Consultancy Services (TCS) and Infosys climbed 1.88 per cent and 0.71 per cent, respectively. Banking and financial counters were the top drags.

Despite the positive close, the market breadth was neutral, with gainers and losers nearly equal in number on the BSE.

In the broader market, BSE midcap and smallcap indices rose 0.56 per cent and 0.47 per cent, respectively.

BSE Telecom index was the biggest sectoral gainer as it advanced 3.45 per cent, while BSE Power index gained 1.73 per cent. BSE Metal index shed the most, down 0.51 per cent.

HDFC Life Insurance jumped 4.42 per cent after NSE Indices said on Thursday the insurance company will replace Vedanta in Nifty-50 index from July 31. SBI Cards & Payment Services climbed 3.18 per cent as it will replace Vedanta in Nifty 500, Nifty 100, Nifty LargeMidcap 250 and Nifty 200 indices.

Motherson Sumi Systems dropped 5.35 per cent after it announced approval to re-organise its businesses, wherein it will demerge its domestic wiring harness (DWH) business into a new company and merge SAMIL with itself. SAMIL is the holding company, which has stakes in both listed Motherson Sumi Systems and unlisted SMRPBV (Samvardhana Motherson Automotive Systems Group BV).

Affle (India) gained 5 per cent after it said it will acquire 8 per cent stake in Singapore-headquartered OSLabs, which operates independent indigenous apps store Indus OS, for $2.86 million.

Foreign portfolio investors (FPIs) sold Indian equities worth $690 million over the past five trading sessions while domestic institutional investors (DIIs) bought $730 million worth of equities in the same period.

The market may consolidate going ahead, and focus will shift to June quarter corporate earnings.

“After a period of sustained one-way movement, it is natural for investors to get complacent. They should guard against this. Risks to the markets emanate from further spiraling of infections and flare-up on Indo china border,” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

Markets at a glance:

• Sensex, Nifty rise for 3rd week in a row
• Sensex, Nifty gain 2.4%, 2.1% for the week
• Sensex rises 0.50% or 178 points today to 36,021
• Nifty gained 0.53% or 56 to 10,607
• 19 of 30 Sensex stocks close higher
• Top Sensex gainers: Airtel up 4.05%, Bajaj Auto 2.52%, TCS 1.88%
• Top Sensex losers: IndusInd drops 1.50%, Tata Steel 1.49%, HDFC Bank 1.42%
• Market breadth neutral; gainers nearly equal losers on BSE
• BSE 500 index up 0.56%; BSE midcap 0.56%, small cap 0.47%
• BSE Telecom top gainer, up 3.45%; ITI up 8.53%, RComm 4.86%
• BSE Power up 1.73%; BHEL up 5.31%, Adani Green 4.99%, Siemens 4.98%
• BSE Metal top loser, sheds 0.51%; JSW Steel 1.83%, Tata Steel 1.49%
• HDFC Life up 4.42% on inclusion in Nifty from July 31
• SBI Cards up 3.18% on inclusion in NSE indices
• Motherson Sumi tanks 5.35% on business rejig plan
• Affle India surges 5% on stake buy in Singapore firm

Who moved my market:

• World equities edge up

Asian shares rallied to a four-month high on Friday on robust U.S. payrolls data and a brisk pickup in Chinese service sector activity, but a surge in coronavirus cases in the United States kept a lid on stronger gains, Reuters reported. European shares too, followed Asian markets, but gains were limited. The pan-European STOXX 600 index rose 0.2 per cent to hover near its strongest level in three weeks, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.66 per cent, reaching the highest level since late February.

• Another record surge in coronavirus cases

The total coronavirus cases in India today rose to 6,25,544 after a record 20,903 fresh cases were reported in the past 24 hours. The death toll from coronavirus rose to 18,213, including 379 fatalities in 24 hours. Across the world, more than 1.08 crore people have been reported to be infected by the coronavirus globally and 5.2 lakh have died, according to a Johns Hopkins University tally.

What to watch out for:

• The relentless surge in new coronavirus cases is a major cause of worry.

• The movement of global markets will be closely watched as the domestic market tends to follow the cues.

• Progress on a vaccine for Covid-19 treatment will be closely monitored.

• The political and military developments between India and China will continue to be in focus.

• The June quarter corporate earnings, which start trickling in from next week, will provide a better picture of the damage caused by the pandemic-induced lockdown.