Sensex and the Nifty indexes ended Tuesday on a positive note, extending weekly gains into the fifth straight week even as world stocks remained shaky on global recession fears after weak economic data from China and the United States.
The benchmark bourses have gained almost 11 per cent during the last four weeks cumulatively, recouping all of the losses they have sustained in 2022. The domestic equity markets had their best week in July since February 2021.
Indian stocks extended their gains on Tuesday, with the 30-share BSE Sensex index jumping 379.43 points, or 0.64 per cent, to 59,842.21 and the broader NSE Nifty index rising 127.10 points, or 0.72 per cent, to 17,825.25.
At close, extending its gaining streak to a sixth session in a row, the broader NSE Nifty 50 index posted its highest level since April 5, as 42 of its constituents advanced.
The Nifty Auto index hit a record high with its 2.6, per cent gain.
Reuters quoting Refinitiv Eikon data reported that 22 of the 43 companies listed on the Nifty 50 index beat analysts' expectations for results in the June quarter. Nearly all Indian companies had reported their results by Friday.
Strong June-quarter results drove shares of Hero MotoCorp and Life Insurance Corporation of India, which ended up 2 per cent and 2.3 per cent, respectively.
Adani Ports and Special Economic Zone was the top percentage gainer on the Nifty 50 after its unit agreed to buy an inland container depot in western India from Navkar Corp Ltd.
Analysts expect the second half of the year to improve for Indian firms, led by softening commodity prices that are expected to ease the pressure on margins.
Easing inflation concerns after the wholesale price-based inflation slowed to a five-month low of 13.93 per cent in July. Buying in index majors Reliance Industries and HDFC twins added to the momentum.
"The easing of inflationary pressures has encouraged domestic investors to remain optimistic about the pace of economic recovery. Better-than-expected CPI numbers, aided by a slower increase in food and fuel prices, may limit the pace of rate hikes by the RBI," Vinod Nair, Head of Research at Geojit Financial Services, told PTI.
From the Sensex pack, Mahindra & Mahindra, Maruti, Asian Paints, Hindustan Unilever, UltraTech Cement, HDFC and HDFC Bank were the lead gainers.
Auto stocks led the rally in the markets. Mahindra & Mahindra surged to an all-time high after it announced a deal with Volkswagen to accelerate the electrification of the Indian auto market.
As part of the deal, Volkswagen AG has agreed to supply electric components to Mahindra's new electric platform INGLO.
The deal was announced on Monday when the stock markets were closed due to Independence Day.
The share price of Mahindra & Mahindra closed at a record high of Rs 1288.40, which is 2.28 per cent higher when compared with its previous session's close.
The stock hit an intra-day high of Rs 1298.80 during the session.
Maruti Suzuki soared 2.19 per cent to Rs 8890.05. Asian Paints surged 2.09 per cent to Rs 3497.55. Hindustan Unilever rose 1.90 per cent to Rs 2644.55.
Reliance Industries Limited witnessed strong buying support in the last hour of the trade. The index heavyweight closed 0.68 per cent higher at Rs 2650.55.
HDFC Bank, HDFC, Tech Mahindra, Bajaj Finserv, Titan, Dr Reddy's Laboratories, ITC and Axis Bank were among the major Sensex gainers.
"Markets maintained their upward bias through the trading session aided by positive global cues and few domestic factors that triggered a rally in realty, automobile and banking stocks," Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, told PTI.
"Moderating domestic inflation level has raised expectations that interest rate hike by the central bank may slow down going ahead. While strong FII fund infusion has certainly bolstered the sentiment of investors," he added.
In the broader market, the BSE mid-cap and small-cap indices both climbed 1.03 per cent each.
Further breakdown showed, BSE auto jumped 2.57 per cent, followed by realty gains of 2.03 per cent, oil & gas up by 1.76 per cent, consumer discretionary goods & services rose 1.58 per cent and power edged up 1.48 per cent.
Telecom and metal were the laggards.
Only five of the 30 stocks that are part of the benchmark Sensex closed in the red. The laggards were the State Bank of India, Bharti Airtel, Bajaj Finance, Tata Consultancy Services, and NTPC.
State Bank of India (SBI), the country's largest lender, slipped 0.90 per cent to Rs 525.90.
Indian markets were shut on Monday as the nation celebrated its 75th anniversary of Independence, while the currency and debt markets remained closed on Tuesday on account of 'Parsi New Year'.
Both the benchmark bourses ended Friday on a high, extending gains for a fourth straight week and marking the longest winning streak since January, before data showed India's consumer inflation dipped to 6.71 per cent in July, aided by a slower increase in food and fuel prices.
Foreign capital inflows have supported domestic equity markets.
According to the latest exchange data, foreign institutional investors (FIIs) were net buyers in the Indian capital market as they purchased shares worth ₹ 3,040.46 crore on Friday.
World stock markets struggled to find direction as they dealt with concerns about global growth in the wake of disappointing Chinese and American economic data that drove down oil prices and currencies tied to commodities.
After sliding almost to their lowest price on Monday since Russia sent soldiers into Ukraine on February 24, Brent crude futures dropped 0.93 per cent to $94.23 per barrel. WTI crude futures fell 0.63 per cent to a barrel price of $88.83.
That fall in crude oil prices likely helped domestic stocks as India imports over 80 per cent of its oil needs, and any fall in international crude prices helps investor sentiment.
The disappointing Chinese activity data released on Monday, including figures for industrial output and retail sales, dampened the mood just as investors were finding solace in a four-week surge in global equities that propelled markets to their best levels in more than three months.
After rising earlier in the day, the MSCI's broadest index of Asia-Pacific shares outside of Japan fell by 0.1 per cent. The benchmark index for MSCI has recovered 5 per cent from its lows for the year, but it is still down 15 per cent for the year.
A further indication that the world's largest economy is slowing down due to the Federal Reserve raising interest rates is that both US single-family homebuilders' confidence and New York state factory activity declined in August to their lowest levels since close to the start of the COVID-19 pandemic.
The Australian dollar, the euro, and the Chinese yuan all lost ground as investors flocked back to the safe-haven currency, sending the dollar temporarily to a one-week high.