RIL Uptrend Continues; Rupee Volatile on Geopolitical Tensions

HIGHLIGHTS

• SEBI looking into Ola Electric for alleged wrongful disclosure: Report
• Aurobindo Pharma shares decline after Andhra unit operations stalled for 20-25 days
• Urban Company files draft papers for ₹19 billion IPO
• Whirlpool India shares rise 10% as report says Advent, Bain Capital eyeing stake in company
• TVS Motor stock sinks over 4% amid muted demand for two wheelers
• CBI questions Nippon Life India MF over ₹35 billion investment limit for ADAG companies
• Paras Defence, BEL, other defence stocks surge ahead of Cabinet meet Wednesday

Indian equity markets ended flat on Tuesday amid mixed sectoral cues and stock-specific action. The NIFTY 50 managed to hold above the 24,300 mark, while the BSE SENSEX closed marginally higher by 70 points at 80,288.

Reliance Industries continued to provide significant support to the market, extending its recent rally and contributing notably to the Nifty’s resilience. The company’s stock posted its largest two-day gain in four years, adding ₹1.5 trillion in market capitalisation, bolstering sentiment even as broader indices moved sideways.

SECTORAL PERFORMANCE 
Defence-linked stocks attracted strong buying interest due to likelihood of increased order flows amid rising geopolitical tensions. Most defence counters rose between 3% and 10%, with Hindustan Aeronautics and Bharat Electronics leading the gains.

The IT sector also recovered from early weakness, with Tech Mahindra, LTIMindtree, and Persistent Systems among the notable performers. This rebound came amid renewed interest in defensives and export-oriented segments.

Life insurance stocks gained after reports indicated the possibility of indexation benefits on high-value policies. Among sectors, capital goods, consumer durables, IT, and oil & gas gained between 0.5% and 1%. On the other hand, metals, power, telecom, and pharma stocks declined in the same range, reflecting mixed investor sentiment.

Top Gainers	% Change	Top Losers	% Change
NIFTY IT	1.2%	NIFTY PHARMA	-1.1%
NIFTY CONSUMER DURABLES	0.6%	NIFTY METAL	-1.0%
NIFTY OIL & GAS	0.5%	NIFTY HEALTHCARE INDEX	-0.9%
		NIFTY MEDIA	-0.8%
		NIFTY FINANCIAL SERVICES	-0.4%

Indian government bond yields eased on Tuesday after the Reserve Bank of India announced a larger-than-anticipated bond purchase plan, calming nerves in a market recently rattled by profit-booking and geopolitical concerns. The benchmark 10-year gilts yield settled at 6.3419%, down from Monday’s close of 6.3959%.

The RBI stated late Monday that it will conduct open market bond purchases worth ₹1.25 trillion in May, spread over four tranches. The announcement surprised many traders, who had not expected fresh liquidity support ahead of the central bank’s annual dividend transfer, typically due later in May.

The RBI’s move was interpreted as a proactive effort to manage liquidity. The 10-year yield had touched a two-week high of 6.4029% on Monday, as traders exited long positions in anticipation of the new 10-year benchmark bond auction and rising geopolitical tensions between India and Pakistan.

Tenure	Today	Previous
10-year Gilt	6.34%	6.40%
5-year gilt	6.08%	6.14%
5-year OIS	5.65%	5.69%

The Indian rupee ended lower on Tuesday after a volatile session, as mounting geopolitical tensions between India and Pakistan weighed heavily on sentiment. The domestic currency slipped 0.3% to close at 85.26 against the US dollar, after briefly touching an intraday high of 84.95 — its strongest level this year — before reversing course to a low of 85.39.

Market participants remained jittery following last week’s militant attack in Jammu & Kashmir that killed several tourists. Unverified reports of possible military activity further unsettled traders, pushing the rupee’s near-term implied volatility to its highest level in over two years. The heightened uncertainty prompted defensive positioning in the currency market, overshadowing otherwise supportive cues.

Despite continued foreign portfolio inflows and improved domestic fundamentals, such as easing oil prices and steady forex reserves, geopolitical developments kept the rupee on the back foot. The closure of several tourist zones in Kashmir — ordered by the local administration — added to concerns.

Unit	Today	Previous
Dollar/Rupee	85.26	85.03
Dollar Index	99.09	98.79
1-year Dollar/rupee premium (%)	2.29%	2.29%

OUTLOOK
Indian equities are expected to remain range-bound on Wednesday as investors weigh geopolitical developments alongside earnings cue. Equities may open cautiously, with broader sentiment swayed by any escalation in India-Pakistan tensions. However, sustained foreign inflows and strong corporate earnings could offer downside protection. 

In the bond market, yields are likely to remain under pressure following the RBI’s announcement of ₹1.25 trillion in open market operations for May. This move is expected to improve liquidity and support government securities, particularly at the longer end of the curve. Traders may also stay focused on the upcoming new 10-year bond auction, with positioning expected to remain cautious ahead of the issuance.

For the Indian rupee, the near-term outlook remains volatile. While portfolio inflows and strong macro fundamentals offer some support, any intensification in geopolitical risk could weaken sentiment. The rupee may continue to move in a wide range, with heightened implied volatility likely to persist. 

Key Events & Data Due Wednesday:

Economic Data

• China April Caixin Manufacturing PMI
• Japan March Industrial Production data
• US January-March advance GDP estimate
• US March core PCE index
• US weekly crude oil inventories data
• US April ADP Non-farm employment data

Corporate Actions

• Jan-Mar Earnings:   Adani Power,  Ajanta Pharma, BEML Land Assets, Equitas Small Finance Bank, Go Fashion (India), Indus Towers, Jindal Steel & Power,  Ksb, Orient Green Power Company, SRG Housing Finance, Steel City Securities, Phoenix Mills, Ujjivan Small Finance Bank, Vedanta, Bandhan Bank, Coromandel International, CRISIL, Exide Industries, Godrej Agrovet, Greaves Cotton, Indian Oil Corporation, JSW Infrastructure, Krystal Integrated Services, LG Balakrishnan & Bros, MOIL, Punjab Chemicals & Crop Protection, Skipper, Sona BLW Precision Forgings, Sundram Fasteners, Federal Bank , Vardhman Acrylics, Varun Beverages, Aeroflex Industries, Paras Defence and Space Technologies, Raghav Productivity Enhancers, R. S. Software (India), 
• Bank of India to consider fund raising
• Bhandari Hosiery Exports to consider fund raising
• Indus Towers to consider dividend, bonus share issue and buyback