The Sensex surged more than 1% on Monday, climbing to 80,218, following a robust rally led by index heavyweight Reliance Industries.
This rally was further supported by the longest streak of foreign portfolio investment (FPI) buying in nearly two years. The Nifty 50 also rose by 1.2%, closing at 24,329, as the market capitalization of BSE-listed companies climbed by ₹4.5 trillion, reaching a total of ₹4.26 trillion.
Reliance Industries accounted for over a third of the gains in both indices, with its shares surging by more than 5%. This came after the company reported strong results for the March quarter, exceeding analyst expectations.
What’s Behind the Surge?
Foreign investors have been flocking to Indian equities, with FPIs purchasing shares worth ₹2,474 crore on Monday.
This marks the longest stretch of net buying since July 2023, amounting to ₹34,941 crore in just nine trading sessions. The momentum can be attributed to a weakening US dollar and inflationary pressures in the US, which have made Indian markets more attractive to overseas funds.
But there’s a caveat. While the foreign buying has been a major driver, investors are being advised to remain cautious in the near term due to ongoing geopolitical tensions. Following the recent Pahalgam terrorist attack, concerns over its potential economic impact have caused some volatility.
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Reliance Leads the Charge
Reliance Industries, a major player in the Indian stock market, had a standout performance.
Its shares rose by 5.3%, marking their strongest single-day gain since October 2024. The company’s diversified business model, which spans oil, telecom, and retail, seems to be paying off. Analysts are particularly bullish on its new energy business, tariff hikes for Jio, and the potential listing of Jio, which could unlock significant value for the company.
Nomura, a prominent brokerage, has raised its target price for Reliance to ₹1,650.
Additionally, the completion of the streamlining process at Reliance Retail is expected to sustain healthy growth in the retail sector.
Market Outlook: The Road Ahead
Despite the positive performance in the equity markets, there’s still a layer of caution. Analysts warn that the geopolitical climate—especially tensions between India and Pakistan following the deadly attack in Pahalgam—could lead to short-term volatility.
However, there is optimism that the Indian market will continue to experience gradual growth, driven by sustained foreign buying and strong earnings reports from companies like Reliance.
In fact, many investors are already looking to specific stocks or sectors, focusing on individual opportunities rather than broad market movements.
“Stock- or sector-specific action will continue on account of ongoing earnings announcements,” said Siddhartha Khemka, head of research for wealth management at Motilal Oswal Financial Services.
The Bottom Line for Investors
For the average investor, this could be a time to reflect on the bigger picture. While the Sensex’s rise is promising, the market is not without risks.
The key takeaway? Diversification and careful monitoring of global events remain crucial. The long-term outlook is positive, but investors must keep their eyes on geopolitical developments and the broader economic environment.
Disclaimer
The views in this article are the author’s and are not financial, investment, or professional advice. This content is for informational purposes only. Readers should consult a qualified advisor before making any financial decisions.
