Equities Settle Higher for Second Consecutive Session; Oil Stocks Rally

Highlights 

•  India’s retail vehicle sales crash 7% in February, rural demand outpaces cities
•  Inox India shares gain over 5% on ₹1.90 billion orders from Europe, Australia
•  Metal stocks rise up on China stimulus hopes.
•  CreditAccess Grameen shares rise 10% after strong business updates
•  Castrol India shares jumps 12% amid buzz of Saudi Aramco weighing bid for BP’s lubricant assets

The Sensex and Nifty 50 extended early gains, closing higher for the second consecutive session, supported by positive global cues and the Reserve Bank of India’s liquidity measures. The rise was driven by strong performances from index heavyweight Reliance Industries and crude-sensitive stocks such as Asian Paints and BPCL.

Among paint manufacturers, Asian Paints emerged as the top gainer on the Nifty, benefiting from Brent crude prices falling below $70 per barrel.

 

SECTORAL PERFORMANCE
The Nifty Oil & Gas index led sectoral gains, surging nearly 3%, followed by the Nifty Energy and Nifty Metal indices, both rising over 2%. The Nifty Bank index edged up 0.3%, supported by the Reserve Bank of India’s (RBI) announcement of liquidity-boosting measures for the banking system.

Top Gainers	% Change	Top Losers	% Change
NIFTY OIL & GAS	2.6%	NIFTY REALTY	-0.2%
NIFTY METAL	2.3%	--	--
NIFTY ENERGY	2.0%
NIFTY PHARMA	1.5%	--	--
NIFTY HEALTHCARE INDEX	1.2%	--	--

The yield on 10-year government bonds eased by 3 basis points after the RBI announced another significant liquidity injection through open market bond purchases and forex swaps.

On Wednesday, the central bank revealed plans to purchase ₹1 trillion worth of government bonds in two equal tranches on March 12 and March 18 under Open Market Operations (OMO). Additionally, the RBI will conduct a $10 billion dollar-rupee buy-sell swap auction with a 36-month tenor on March 24.

Since January, the RBI has already injected over ₹4.5 trillion into the banking system through bond purchases, FX swaps, and long-term variable rate repo auctions.

Tenure	Today	Previous
10-year Gilt	6.68%	6.71%
5-year gilt	6.61%	6.62%
5-year OIS	5.96%	5.96%

The Indian rupee depreciated by 15 paise, weighed down by concerns over trade tariffs and continued foreign fund outflows. However, losses were limited due to gains in domestic equities, a weaker dollar idnex, and declining crude oil prices.

Investors remained cautious ahead of US weekly unemployment claims data and the European Central Bank’s (ECB) monetary policy announcement. Meanwhile, dollar/rupee forward premiums plunged following the RBI’s announcement of an FX swap auction.

 

Unit	Today	Previous
Dollar/Rupee	87.1100	86.9600
Dollar Index	104.1800	104.2520
1-year Dollar/rupee premium (%)	2.06%	2.21%

OUTLOOK
Indian equities may open steady on positive cues globally as US President Donald Trump's decision to delay tariffs for automobile imports from some countries raised hopes of further negotiations. However, the recovery could face disruptions as Trump's tariff statements will continue to make investors nervous and trigger selling going ahead.

For Friday, rupee is expected to trade in a range of 86.75 to 87.25 with upticks getting sold as uncovered exporters may sell dollars to cover for year-end inflows.

Key Events and Data to Watch on Friday

• UK February Halifax house price index 
• Eurozone Oct-Dec employment data 
• US February employment report 

Corporate Actions on Thursday

• AU Small Finance Bank board to discuss fundraising plans
• Bohra Industries board to discuss fundraising plans 
• Emkay Global Financial Services board to discuss fundraising plans 
• G R Infraprojects board to consider dividend 
• Iris Clothings board to discuss fundraising plans
• Navkar Urbanstructure board to consider bonus share issue and stock split
• Sun TV Network board to consider dividend 

Other Key Events

• US Federal Reserve Bank Atlanta President Raphael Bostic speaks