RIL, banking stocks lead rebound on value buying

Mumbai: Rebounding from their worst single-day slide in four years, benchmark stock indices Sensex and Nifty soared over three per cent each on heavy value buying by investors after NDA alliance partners started talks on government formation. The 30-share BSE Sensex jumped 2,303.19 points or 3.20 per cent to settle at 74,382.24 on value buying in banking, auto and oil shares. All Sensex shares closed in the green. During the day, it zoomed 2,455.77 points or 3.40 per cent to 74,534.82. The NSE Nifty climbed 735.85 points or 3.36 per cent to 22,620.35 with all its constituents ending with gains. During the day, the benchmark soared 785.9 points or 3.59 per cent to 22,670.40. “Indian market exhibited a spirited recovery driven by broad-based buying across various sectors, as political stability appears assured. However, attention will remain on the formation of the government and the forthcoming RBI policy meeting,” said Vinod Nair, head (research), Geojit Financial Services.

“We also expect some populist measures to address rural stress and lift sentiments at the margin, given the nature of the verdict,” a report by Motilal Oswal Research stated. “Going ahead the narrative around government formation and RBI monetary policy would take the centre stage in near term. Despite the reduced seats, we expect the government focus to continue on investment-led growth, capex, infrastructure creation, manufacturing, etc., in the long term,” added Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services Ltd.

As many as 2,597 stocks advanced while 1,221 declined and 100 remained unchanged. In the broader market, the BSE midcap gauge jumped 4.41 per cent and smallcap index rallied 2.93 per cent. All the indices ended in the green, with telecommunication soaring 6.01 per cent, services jumping 5.74 per cent, metal (5.36 per cent), auto (4.50 per cent), commodities (4.48 per cent) and consumer discretionary (4.29 per cent).

Heavy buying in HDFC Bank, ICICI Bank and Reliance Industries helped benchmark indices log sharp gains. Investors became richer by Rs13.22 lakh crore on Wednesday with markets making a strong comeback. Senior leaders of the BJP-led National Democratic Alliance deliberated on the details of government formation at a meeting here on Wednesday, a day after the ruling coalition won a majority in the Lok Sabha election which paved the way for a third term for Prime Minister Narendra Modi. Coalition partner TDP also affirmed that it was with the NDA assuaging investors’ concerns over government formation and triggering a sharp value buying in recent losers.