On March 3, the stock market saw a significant uptick, with bulls back in full force, resulting in the benchmark indices recording their largest one-day rally in the past 16 weeks. Adani Group‘s fundraising through block deals with Goldman Sachs and GQG Partners contributed to market participants’ confidence, in addition to the robust services PMI data from India and China, and positive global cues that lifted the overall sentiment.
The BSE Sensex surged 900 points, or 1.53 percent, to 59,809, and the Nifty50 jumped 272 points, or 1.57 percent, to 17,594, representing the most substantial one-day rally since November 11, 2022. The buying was spread across various sectors, with the Nifty PSU Bank index seeing the most significant gain, with over a 5 percent surge, particularly after Adani Group’s fundraising. The Nifty Metal index also rallied 3.5 percent, while the Nifty Private Bank index rose by 1.6 percent.
On Friday, investors’ wealth increased by Rs 3.3 lakh crore, with the BSE market capitalisation rising to Rs 263.30 lakh crore, up from Rs 259.99 lakh crore in the previous session.
According to Naveen Kulkarni, Chief Investment Officer at Axis Securities, “Adani group development will also lead to better sentiments for the market and increase retail participation, which was down due to uncertainty. The investment also leads to a belief that Adani group stocks have stabilized and can raise capital if they want at current prices.” He also stated that this development should support banks, particularly public sector ones that were hit earlier despite good performance due to fears of their exposure to the Adani group.
The Adani Group’s top gainer was Adani Enterprises, which surged 17 percent, followed by Adani Ports with nearly 10 percent gains. Ambuja Cements, Adani Green Energy, Adani Transmission, Adani Total Gas, Adani Wilmar, ACC, and Adani Power all saw 5 percent gains.
Although the Nifty50 had recovered nearly 2 percent losses after hitting the current year’s low on February 28, and the NSE Vix index’s volatility had cooled considerably to 12 levels, falling by 6 percent, experts are still unsure about the current rally due to the risk of ongoing policy tightening by central banks.
“We expect the markets to have a short-term bounce due to increased optimism, but are still concerned about global interest rates and higher valuations, which can lead to increased medium-term volatility,” Kulkarni stated. He advised investors to maintain investment discipline and continue to invest regularly in equities for long-term wealth creation, especially during short-to-medium-term market volatility.
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