Index heavyweights like Reliance Industries notched up 3 percent in the trade as international brokerages Morgan Stanley and JPMorgan reaffirmed their bullishness on the diversified conglomerate.
After months of caution, bulls roared back to life, delivering a stunning rebound on the Street just a day after Gautam Adani’s bribery-related fears rattled investors. Benchmark indices Nifty and Sensex surged, marking their biggest rally in five months, adding Rs 7.5 lakh crore in market value, as renewed buying swept across all sectors, fueling a dramatic turnaround.
While uncertainty over the Russia-Ukraine conflict and relentless FII selloffs continue to loom, traders believe decisive triggers could shape the market’s path. In the near term, the Maharashtra election results are poised to play a pivotal role in steering sentiment.
At about 3:10 pm, the Sensex was up 2,005.67 points or 2.60 percent at 79,161.46, and the Nifty was up 582.10 points or 2.49 percent at 23,932.00. About 2183 shares advanced, 1176 shares declined, and 91 shares unchanged.
“While it is a strong bounce-back, at the end of the day, it’s a single-day recovery, and that’s not an indication that the markets are on course for a recovery,” said Ajit Mishra, Senior Vice President of Religare Broking, in a conversation with Moneycontrol. “Given that we have breached the 200 DMA, we could see another bounce-back, but FII selling and its intensity are factors investors need to monitor closely,” he added.
During the afternoon, all 13 sectors rallied with PSU Bank, Realty, Infra and IT being the brightest sparks in trade with gains of up to 3 percent. Public sector lenders took a beating yesterday after the Gautam Adani bribery case shed light on the lender’s exposure to the Adani Group companies.
The IT index surged nearly 3 percent, extending its impressive 28 percent rally since the start of the year. Boosting sentiment was favourable US labour market data, which revealed a drop in jobless claims by 6,000 to a seasonally adjusted 213,000 for the week ending November 16—a seven-month low. The data indicates a potential rebound in US job growth for November, following last month’s slowdown caused by hurricanes and strikes.
Other gainers include Nifty Bank, FMCG, Pharma, and Healthcare also jumped in trade today, rallying just shy of 2 percent each.
Index heavyweights like Reliance Industries notched up 3 percent in the trade as international brokerages Morgan Stanley and JPMorgan reaffirmed their bullishness on the diversified conglomerate, reiterating ‘overweight’ tags, as the petrochemical producer saw its refining margins improve. According to JPMorgan, one of two drivers of Reliance Industries’ recent underperformance was the weak refining margins, but the trend is now reversing. The second driver is lower sales growth on the retail front.
India’s largest public sector lender State Bank of India soared nearly 5 percent after Jefferies reiterated its “buy” rating with a target price of Rs 1,030. This suggests a potential 29 percent upside from current levels. The brokerage identified SBI as its top sector pick, emphasising the scope for improvement in the loan-to-deposit ratio (LDR) as deposit mobilisation gains momentum.
Fintech player Paytm was buzzing in trade, rising over 5 percent in the afternoon and extending gains for a fifth trading session, after Bernstein recently dished out a positive call on the fintech player. The international brokerage reaffirmed its bullishness on Paytm as the narrative for the beleaguered fintech player changes from survival to optimism.
In a remarkable reversal, most of the Adani Group stocks turned positive and climbed as much as 3-4 percent on November 22 after the previous day’s massive sell-off triggered by bribery charges in the US against Gautam Adani. Ten of the 11 Adani Group companies, including cement players ACC, Ambuja, and Adani Total Gas, recovered from lows to trade in the green.
In the broader market, mid-cap and small-cap indices mirrored robust overall trendings, rising 1.1 percent and 0.8 percent, respectively. “We need to be extra careful with microcap stocks due to high volatility in the space,” said Gaurang Shah, Head of Investment Strategy at Geojit Financial Services. “For small and midcap stocks, investors are advised to adopt a stock-specific approach,” he added.
“While there are questions about sustainability, it is clear that until we see a decisive break of the zone at 23,800-24,000, any pullbacks should be seen as opportunities to exit long positions. Given the current circumstances, 23,200-23,100 is likely to be tested during this comparable period. Therefore, a strong risk management strategy is recommended to address the current situation,” Sameet Chavan, Head of Technical and Derivative Research at Angel One, said.
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