Bulls made a strong comeback on Dalal Street on Monday, driven by the country’s largest listed company, Reliance Industries Ltd (RIL), along with support from oil marketing companies (OMCs), pharma companies and major banks. The benchmark BSE Sensex surged 1,005.84 points, or 1.27%, to close at 80,218.37, while the Nifty rose 289.15 points, or 1.20%, to settle at 24,328.50.
Reliance Industries dominated the buying counter after reporting strong Q4FY25 earnings, with its stock climbing nearly 6% intraday before closing 5.07% higher at Rs 1,336.30 apiece on the NSE. The conglomerate posted a 2.4% increase in profit at Rs 19,407 crore for Q4 FY25, surpassing Street estimates. Following the results, brokerage firms issued multiple upgrades for the stock.
Sectorally, oil & gas, banks, pharma, energy, and metals ended in positive territory, while only the IT sector closed in the red. In the broader market, the Midcap 100 and Smallcap 100 indices gained 0.8% and 1.6%, respectively.
The return of foreign institutional investors (FIIs) has also provided a boost to the rally. FIIs have infused over Rs 32,000 crore in the past eight days amid the relative underperformance of US equities, bonds, and the dollar.
“The domestic market recouped from the losses incurred during the last two days of the previous week, which stemmed from the border tensions. Sustained buying from FIIs and better results from RIL also boosted investor sentiment. A weakening dollar and inflationary pressure in the US may attract FIIs into the domestic market,” said Vinod Nair, Head of Research at Geojit Investments Limited.
Defence stocks witnessed another session of heavy buying amid escalating tensions between India and Pakistan following a deadly terror attack in Jammu and Kashmir’s Pahalgam. The Nifty Defence index surged 4.5% on Monday, led by Paras Defence and Space Technologies, Garden Reach Shipbuilders & Engineers, and Data Patterns (India).
Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity, noted that global investors continued to monitor developments in US-China trade talks closely. “Market sentiment remains sensitive to updates, as progress between the two economies could significantly influence global trade dynamics,” he said.
Nair advised investors to remain cautious in the near term as the market is yet to price in the potential impact of retaliation for the Pahalgam terror attack. “For new investors, maintaining a 40% allocation in cash and debt with a bottom-up approach to equity based on earnings outcomes will be a beneficial strategy,” he added.
Ajit Mishra – SVP, Research, Religare Broking said that buoyancy is certainly encouraging; however, participants should maintain a positive yet cautious bias, given the lingering geopolitical tensions. “A decisive breakout above 24,400 could trigger fresh momentum in the Nifty, potentially propelling it towards the 24,800 marks. Amidst all this, the focus should remain on sectors and themes showing consistent outperformance, with an aim to accumulate quality counters on any intermediate dips,” added Mishra.