reliance rally, ipos, and tariff drama

what matters now

india's stock market is riding a wave of optimism with the sensex rebounding 1,000+ points (1.27%) to cross 80,000, primarily driven by reliance industries' 5.3% surge after strong quarterly results. foreign inflows remain robust despite geopolitical tensions with pakistan. major earnings season continues with mixed results: ambuja cement and ultratech show growth but margin pressure, while trent and indusind bank face challenges. global trade tensions are easing slightly, with trump planning concessions on auto tariffs. the 2.2 trillion rupee ipo market shows early signs of revival, with current offerings like ather energy generating tepid response. rbi adds liquidity through planned bond purchases of ₹1.25 lakh crore.

market resurgence: reliance propels sensex past 80k amid foreign inflows

the indian stock market staged a dramatic comeback on monday, with the sensex soaring over 1,000 points (1.27%) to close at 80,218.37, while the nifty climbed 289 points (1.2%) to 24,328.50. this rally erased losses from the previous week that had been triggered by escalating india-pakistan tensions following a deadly attack in pahalgam.

reliance industries emerged as the star performer, jumping 5.3% after reporting better-than-expected quarterly results, single-handedly contributing around 400 points to the sensex gain. jp morgan analysts suggested the stock's attractive valuation could drive further price increases. the rally also reflected strong foreign institutional investment, with fiis purchasing approximately ₹2,474 crore, continuing an eight-day buying streak totaling ₹32,465 crore.

broader market fundamentals showed improvement with the weakening us dollar (falling from 109.88 to 99.60) positively impacting emerging markets. declining crude oil prices (below $66 per barrel) provided additional relief by alleviating inflation concerns for india, a major oil importer. technical analysts now suggest the nifty could potentially reach 25,000 in the near term if it breaks through resistance at 24,360.

despite the overall positive sentiment, market breadth remained mixed with 1,914 stocks advancing against 2,091 declining. all sectoral indices closed positively except for it, with the bank nifty rising 1.4% and defensive sectors like psu banks rallying 2.4%. the nifty mid-cap and small-cap indices gained 1.4% and 0.5% respectively, indicating continued investor interest despite mixed sentiment.

earnings season: ultratech, ambuja shine while indusind bank faces headwinds

q4 results are painting a picture of moderating growth with sector-specific challenges. ultratech cement reported strong numbers with a 10% year-on-year growth in consolidated net profit to ₹2,482 crore and a 14% rise in consolidated sales to ₹22,788 crore. the company achieved its highest-ever quarterly sales volume, up 17% year-on-year (including acquisitions), though ₹4-16% cost reductions in logistics, fuel, power, and raw materials helped offset pricing pressures. management projections for the sector remain cautiously optimistic, forecasting 7-8% sustainable volume growth despite near-term challenges.

similarly, ambuja cements reported its highest-ever quarterly volume with 13% year-on-year growth. however, while consolidated pat grew 75% to ₹956 crore, beating estimates, this was a 55% sequential decline from q3. the company has demonstrated strategic expansion by crossing the 100 mtpa capacity milestone, positioning it as the 9th largest cement company globally.

banking results showed mixed performance. indusind bank is projected to report a potential q4 net loss between ₹300-600 crore due to derivatives-related losses of approximately ₹1,959 crore. an investigation revealed accounting irregularities involving premature termination of derivative contracts that had artificially inflated previous profits. deputy ceo arun khurana resigned following these revelations, with the stock falling nearly 25% since the announcement.

in contrast, pnb housing finance recorded a 25% year-on-year increase in net profit to ₹550 crore, with net interest margin improving to 3.75% and asset quality strengthening as the non-performing assets ratio reduced by 42 basis points. central bank of india similarly reported a 28% year-on-year jump in net profit to ₹1,033.6 crore, albeit with a 4% decline in net interest income.

the tech sector showed resilience with hexaware technologies reporting a 17% year-on-year increase in net profit to ₹327 crore, with revenue up 17% to ₹3,207 crore. however, kpit technologies noted slowing growth, with management guiding for accelerated performance only in q3 of the fiscal year.

trade wars and tariffs: global markets navigate uncertainties

the ongoing trade tensions between the us and china continue to cast shadows over global markets, though some signs of moderation are emerging. us treasury secretary scott bessent indicated that the responsibility for de-escalating tariff tensions lies with china, while china's foreign ministry stated that no negotiations or consultations on tariffs have taken place between the two nations.

in a notable development, the trump administration announced plans to ease auto tariffs by preventing duties on foreign-made cars from stacking on top of existing tariffs and reducing levies on foreign auto parts used in us manufacturing. this move comes in response to industry concerns about supply chain disruptions and potential production halts. commerce secretary howard lutnick positioned this as a strategic partnership with domestic automotive manufacturers, framing it as a win for american trade policy.

the indian auto component sector could still face challenges, with icra warning that new us tariffs might reduce earnings by ₹2,700-4,500 crore. exporters could see a 10-15% earnings decline, though companies with us-based operations may be partially shielded. the domestic auto industry maintains resilience with over 70% of revenue coming from local sales.

currency markets reflect these uncertainties, with the indian rupee briefly strengthening to 84.95 against the us dollar (its highest level in 2025) before settling at 85.03. this improvement coincided with anticipated capital inflows into local equities and the positive performance of benchmark indices. however, technical resistance near the 200-day moving average around 84.97-84.98 poses a challenge for further appreciation.

globally, chinese stock markets exhibited slight declines amid investor caution, with the shanghai composite index falling 0.05% and the blue-chip csi300 index decreasing 0.17%. though china has begun to exempt some us goods from heavy tariffs, the broader relationship remains strained, with chinese officials emphasizing that the country is bracing for potential economic decoupling from the us.

ipo market: caution persists despite signs of recovery

the indian ipo market is showing tentative signs of recovery after a slow start to 2025, though caution remains the watchword. the pipeline of nearly ₹2 lakh crore worth of potential ipos faces challenges from market volatility, with companies like lg electronics postponing their indian subsidiary's listing that was initially planned for may.

ather energy's ipo has received a lukewarm response on its second day of bidding, with overall subscriptions barely crossing 23%. retail investors showed relatively higher interest with 94% subscription rates, while non-institutional investors subscribed to only 19%. the grey market premium for ather's shares has declined significantly from ₹7 to ₹1, reflecting subdued enthusiasm. analysts attribute this reduction to broader market selling pressure, though some still maintain positive recommendations based on the company's fundamentals in the electric scooter market.

meanwhile, urban company has proposed an ipo aiming to raise up to ₹1,900 crore, comprising a fresh issue of shares worth up to ₹429 crore and an offer for sale of existing shares worth ₹1,471 crore. the company reported 30% revenue growth in fy2024, reaching ₹828 crore, while narrowing losses from ₹312 crore to ₹93 crore.

canara hsbc life insurance has filed its draft red herring prospectus with sebi for an ipo consisting of 23.75 crore equity shares. the pure offer for sale includes shares from canara bank, hsbc insurance, and punjab national bank. the company has shown strong financial performance with its profit after tax surging at a cagr of 232.61%, from ₹102.43 million in fy22 to ₹1,133.17 million in fy24.

the cost of going public remains a significant consideration, particularly for smaller companies. recent data shows ipo expenses can range from 1.5% to 17% of funds raised, with costs inversely related to offering size. small issuers like mukka proteins and shah polymers faced expenses of 17.1% and 16.6% respectively, while larger companies like bharti hexaware had costs of just 1.51%.

rbi's bond buying spree: unprecedented liquidity injection

the reserve bank of india has announced plans to purchase government bonds worth ₹1.25 lakh crore through open market operations (omo) in four tranches during may. this initiative aims to reduce government bond yields before a scheduled 10-year bond auction and forms part of a broader strategy to enhance banking system liquidity.

according to citibank analysis, this latest round will bring the rbi's total bond purchases for 2025 to approximately ₹5.3 lakh crore, a pace described as "unprecedented." the immediate market reaction has been positive, with expectations that this could lower government bond yields by 4-5 basis points. the 10-year benchmark yield had recently increased slightly to 6.39% from 6.36%.

the rbi's decision comes against a backdrop of ongoing border tensions between india and pakistan, which had contributed to an uptick in yields of about 7-8 basis points. the central bank appears to be taking proactive measures to counteract these pressures and stabilize the bond market ahead of the upcoming auction, which aims to raise ₹30,000 crore through a new 10-year bond.

beyond yield management, these omo purchases are expected to help ease banking system liquidity to 1% on net demand and time liabilities and offset monthly goods and services tax outflows. this liquidity policy might also aim to improve transmission of future rate cuts, positioning the financial system for potential monetary policy adjustments in the coming months.

gold and silver: price correction creates buying opportunity

gold prices have experienced a significant correction, falling by approximately 5% or ₹4,700 from their recent peak, now trading below ₹95,000 per 10 grams. this decline follows gold reaching an all-time high of ₹99,358 per 10 grams and comes just ahead of the auspicious buying occasion of akshaya tritiya, traditionally associated with gold purchases.

the retreat in prices is primarily attributed to two factors: easing trade tensions between the us and china, reducing gold's appeal as a safe-haven asset, and the strengthening us dollar. technical indicators suggest the momentum of the rally is cooling, with the relative strength index retreating to 65 from previously overbought levels near 75.

despite this correction, gold has still delivered impressive gains of about 25% in 2025 so far, adding approximately ₹18,000 per 10 grams in value since the beginning of the year. analysts recommend that investors consider a "buy-on-dips" strategy as long as prices remain above the support level of ₹93,000, while staying vigilant about upcoming us economic data that could further impact prices.

interestingly, silver may be positioned for stronger performance relative to gold in the near term. the gold-to-silver ratio currently stands at 100, marking its highest level since the onset of the covid-19 pandemic in 2020. historically, this ratio has exceeded 100 only three times in the past 50 years, with notable recoveries in silver prices usually following such events. this potential "catch-up rally" for silver could see prices reaching $35-36 per ounce, translating to approximately ₹1,02,000-1,10,000 per kilogram in indian markets.

quick snippets and conclusion

• q4 results roundup: trent limited revenue grew 28.8% to ₹4,106 crore but net profit dropped 47%; bpcl saw 31% decline in net profit to ₹3,214 crore; tvs motor reported 76% rise in profit to ₹852 crore with margins improving to 13.95%; uco bank reported 24% increase in net profit to ₹665.72 crore; castrol india profit up 8% at ₹234 crore.

• sector movements: nifty defence stocks rallied up to 9% following tensions at india-pakistan border; nifty realty index advanced 0.55%; psu banks showed strength with nifty psu bank up 1.7%.

• corporate actions: mahindra & mahindra to acquire sml isuzu, aiming to increase lcv market share to 10-12% by fy31; whirlpool corporation contemplating sale of 31% stake in its indian subsidiary; adani green independent review found no irregularities related to us indictment; hexaware selling entire stake in coforge advantage to sapiens uk for £43 million.

• regulatory developments: sebi banned broker patel wealth advisors and four directors for "spoofing" – placing fictitious orders to manipulate markets; life insurance company ceos meet with dfs secretary seeking indexation benefits on policies exceeding ₹5 lakh annual premium.

• crypto watch: bitcoin maintains position near $95,000 with strong institutional inflows, despite $380 million etf outflows. market capitalization of overall crypto market slightly up at $2.98 trillion.

the indian markets show resilience amid global uncertainties, with the combination of strong corporate earnings, robust foreign inflows, and tactical intervention by the rbi creating a supportive environment for investors. however, caution is warranted with q4 earnings showing mixed results and nomura analysts warning of potential 5-6% earnings cuts for fy26. the ongoing trade tensions between global powers and recent geopolitical flare-ups add complexity to an already challenging investment landscape.