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Reliance Results and foreign inflows boost sentiment

Reliance Results and foreign inflows boost sentiment

Indian shares rose Monday on the back of better-than expected earnings from Reliance Industries, and steady inflows of foreign capital, which helped markets to shrug off a risk-off mood amid India-Pakistan tensions.

The BSE Sensex rose 1.27%, or 1.2%, to 80.218, while the Nifty 50 gained 1.2%.

Reliance Industries rose 5.26% to a six-month-high, contributing to a third of the gains in the Nifty 50 after analysts upgraded the stock following a fourth-quarter profit beating.

Foreign portfolio investors (FPIs), despite tensions between India, Pakistan and the aftermath of the attack on Kashmir, continued to buy Indian stocks at the end of the session for the eighth time in a row, further boosting sentiment.

There was a lot fear about what could happen at the border. The fact that there has been no major incident has given the market some hope," said G Chokkalingam. He is founder and head researcher at Equinomics.

Chokkalingam added that besides this, the expectation of a bilateral agreement between India and America, New Delhi’s relative resistance to tariffs in comparison to China, and interest in large-caps with attractive valuations, such as Reliance, could keep markets buoyant.

IT closed down 0.2% on Monday. Heavyweight financials with significant exposure to foreign investors rose by 1%. The IT index rose 6.6% in the last week.

The mid-cap and small-cap indices both rose by 0.8% and 1.6% respectively.

Mahindra & Mahindra, among other stocks rose 2.3%. It was also one of the six top gainers on Nifty after it announced its plans to purchase a majority stake in SML Isuzu at a price of 5.55 billion rupees.

SML Isuzu, however, fell 10% because the deal valued shares at a discount of 63.3% to Friday's close.

Defence stocks rose 4.1%. An official in the Indian defence ministry confirmed that India had signed a contract with France to purchase 26 Rafale aircraft for $7.41 billion.

(source: Reuters)