Sensex, Nifty rise on election boost, gains capped by weak rupee

Markets closed higher on Monday after early gains drew support from state election trends and earnings optimism. The rally lost steam later as a weak rupee, firmer crude and profit booking kept investors cautious.

In Short

• Adani Ports leads gains, Bharti Airtel and Kotak Mahindra Bank fall
• Nifty Realty, metal, pharma sectors up; IT and media sectors decline
• Rupee weakness and rising crude oil prices cap market gains

Benchmark stock market indices ended higher on Monday, supported by positive sentiment around state election trends and steady earnings optimism, although gains were capped by a weakening rupee and rising crude oil prices.

The BSE Sensex closed 355.90 points, or 0.46%, higher at 77,269.40, while the Nifty 50 gained 121.75 points, or 0.51%, to settle at 24,119.30.

Markets had rallied nearly 1% in early trade, reacting to favourable election trends in West Bengal, but pared gains as the session progressed amid profit booking and macro concerns.

Buying was largely broad-based, with several heavyweights leading the charge.

Among Sensex stocks, Adani Ports emerged as the top gainer, rising 5.30%, followed by Hindustan Unilever up 2.60%, Reliance Industries gaining 2.24%, Larsen & Toubro up 2.18%, Eternal rising 2.09% and Maruti Suzuki advancing 2.02%. Bajaj Finserv and Bajaj Finance also posted solid gains.

On the flip side, losses were seen in select heavyweights. Bharti Airtel declined 3.14%, Kotak Mahindra Bank fell 2.82%, TCS dropped 1.73%, ITC slipped 1.25% and Infosys lost 1.11%, weighing on the indices.

Sectorally, the rally remained mixed. Realty stocks stood out, with the Nifty Realty index jumping 2.41%. Metal, pharma and financial services indices also saw gains, rising 1.09%, 0.89% and 0.84%, respectively. However, IT stocks remained under pressure, with the Nifty IT index falling 0.95%, while media and PSU bank indices also ended in the red.

Broader markets outperformed the benchmarks, with the Nifty Midcap 100 rising 0.63% and the Nifty Smallcap 100 gaining 0.70%, indicating sustained risk appetite. India VIX, a measure of market volatility, eased 0.86% to 18.30 levels.

Crude oil prices, however, remained a key overhang. Brent crude traded around $113.5 per barrel, up nearly 5%, while WTI crude rose over 4% to around $106.5 per barrel, reflecting continued concerns over supply disruptions amid geopolitical tensions.

Vinod Nair, Head of Research, Geojit Investments Limited, said investor sentiment was supported by domestic triggers but global uncertainties persisted.

"Investor sentiment remained supported by a favourable election outcome in West Bengal and a better-than-expected Q4 earnings, helping markets look past Middle East-related concerns. However, intermittent profit booking persisted amid uncertainty surrounding the U.S. 'Project Freedom' initiative to reopen the Strait of Hormuz. While the resolution path may take time, optimism around gradual progress continues. Crude prices holding below $110 are providing near-term comfort."

He added that the outlook remains dependent on global developments.

"Going ahead, market direction will hinge on geopolitical developments and oil price trends, given their impact on inflation, interest rates, the rupee, and corporate margins."

The rupee’s continued weakness also limited gains, as a softer currency raises concerns around imported inflation and foreign capital flows.

While markets ended in the green, the late-session pullback highlights that investors remain cautious, balancing domestic optimism with global risks.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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