Markets Reflect a Beacon of Hope

Optimism in the IT industry, improvement in macroeconomic conditions and a significant FII inflow contributed to the rally

The last fortnight has been a roller-coaster ride for Indian benchmark indices with constant climbs and declines. Nevertheless, optimism fuelled by improved macroeconomic conditions, a positive earnings outlook and a sizeable FII inflow assisted the indices end the fortnight period with considerable gains. The BSE Sensex advanced 0.25 per cent to a five-month high of 62,501, while the Nifty 50 gained 0.55 per cent in the past two weeks. The advance-decline ratio remained strongly in favour of advances for the majority of the time, exhibiting optimistic investor sentiments in broader markets.

This led the BSE Mid-Cap and BSE Small-Cap indices to post gains of 1.82 per cent and 1.35 per cent, respectively. While the majority of sectoral indices had a lacklustre performance, the information technology sector stunned investors by outperforming other sectors by a substantial margin. The BSE Information Technology index climbed more than 4 per cent while shares of Sensex IT constituents Infosys, Tech Mahindra and Wipro soared 4-5 per cent, reflecting strength in the global IT industry. Shares of Nvidia Corporation, an American multinational technology company, have skyrocketed more than 25 per cent in a single session, spurred by the company’s efforts to diversify its portfolio to offer more AI products and services. 

The fast-moving consumer goods (FMCG) and healthcare sectors also witnessed notable growth. The BSE Metals and BSE Bankex indices witnessed the worst performances and were under selling pressure. State Bank of India, on the other hand, declared a record net profit in the March quarter and crossed the Rs 50,000 crore mark for FY23 – the first time any bank in India has achieved that level. The Adani Group stocks enjoyed a remarkable rebound after receiving relief from the Supreme Court-appointed panel. Heavy buying interest boosted shares of Adani Enterprises by more than 32 per cent over the course of the past two weeks.

Shares of Adani Power and Adani Green Energy also experienced a much-needed rally, hitting back-to-back upper circuits. In other developments, data issued by the Ministry of Commerce and Industry stated that India’s wholesale price index (WPI)-based inflation declined to a 34-month low in April owing to lower prices of food, fuel and manufactured goods. According to figures released by the Ministry of Statistics and Programme Implementation, India’s industrial output rose 1.1 per cent in March, which was the lowest rate in five months. Interestingly, both FIIs and DIIs have been net buyers over the last fortnight. In the last 15 days, FII inflows totalled Rs7,328.69 crore while DII inflows recorded Rs 2,804.76 crore.