Sensex, Nifty Defy Global Gloom And Gain On Capital Inflows, Cooling Oil

Equity benchmarks extended their gains on Monday after closing out the previous session by logging their third straight weekly rise, defying a broader global stock market gloom, as a fall in oil prices, robust capital inflows and strengthening automobile stocks boosted investor sentiment.

The 30-share BSE gauge climbed 465.14 points or 0.80 per cent to finish at 58,853.07. During the day, it jumped 546.97 points or 0.93 per cent to 58,934.90.

The broader NSE Nifty gained 127.60 points or 0.73 per cent to end at 17,525.10.

Both the benchmark indexes on Friday had logged their third straight weekly gain, advancing 1.4 per cent each.

Mahindra & Mahindra was the biggest gainer from the Sensex pack, climbing 3.13 per cent, followed by Bajaj Finserv, NTPC, Axis Bank, HDFC Bank, Larsen & Toubro, HDFC, Dr Reddy's, IndusInd Bank and Reliance Industries.

The Nifty index heavyweight Reliance Industries Limited rose 1.30 per cent to Rs 2566.80.

There was strong buying support in private banks and financial stocks. HDFC Bank surged 2.41 per cent to Rs 1460.95. Axis Bank rose 2.40 per cent to Rs 745.75. HDFC rose 1.72 per cent to Rs 2394.30. IndusInd Bank rose 1.37 per cent to Rs 1050.55.

Mahindra & Mahindra surged 3.13 per cent to Rs 1274.85. Bajaj Finserv rose 2.95 per cent to Rs 15534.20. L&T, NTPC, Dr Reddy's Laboratories and Maruti Suzuki were among the major Sensex gainers.

State Bank of India, UltraTech Cement, Nestle, Wipro and Power Grid were among the major laggards.

State Bank of India dipped 1.95 per cent to Rs 520.30. Share price of State Bank of India (SBI) slumped after the country's largest lender announced 7 per cent decline in its standalone net profit for the quarter ended June 30, 2022.

“Despite a small blip in early trades, bulls quickly rejuvenated and maintained their stranglehold even as other Asian peers ended mixed. FIIs (Foreign Institutional Investors), who were missing from the action over the past few months, have once again started taking exposure to local equities, thus providing a major impetus to the markets," said Shrikant Chouhan, Head of Equity Research for Retail at Kotak Securities.

Foreign investors have poured $1.79 billion into Indian equities so far this month, according to Refinitiv data.

"Sustained FII buying and falling oil prices are the major drivers for the ongoing market rally. Heavyweights played a significant role in today's rise, while PSU banks remained under pressure following weak results of the PSB major," said Vinod Nair, Head of Research at Geojit Financial Services

Foreign institutional investors remained net buyers in the capital markets as they bought shares worth Rs 1,605.81 crore on Friday, per exchange data.

"The price of crude staying below 95 and foreign investors buying Indian shares last week are mainly the two factors that are keeping us positive," Neeraj Dewan, director at Quantum Securities, told Reuters.

Oil prices hovered near multi-month lows - below $95 a barrel - on Monday, as data pointed to a slow recovery in China's crude imports in July. 

That is good news for India, the world's third largest importer of oil, as a fall in crude prices brings down imported inflation and eases the pressure on the domestic currency.

Still, the rupee weakened sharply on Monday, driven by a a re-energised dollar on bets for bigger-sized Fed rate hikes made their way back after solid US jobs data.

In Asia, markets in Seoul, Shanghai and Tokyo ended higher, while Hong Kong settled with losses.

European bourses were trading in the green during mid-session deals. The US markets had ended mostly lower on Friday.

Indian stock market investors will now shift their focus from monetary policy to inflation statistics, both in India and the US, which are expected later this week.

Indian markets will be closed on Tuesday for a holiday.