Mumbai: Surge in banking stocks and firm cues from global peers drove the Indian equity markets higher on Friday, with the benchmark indices logging gains in seven of the past eight sessions.
However, analysts were concerned that the rally could be moving ahead of fundamentals. Spike in new Covid-19 infections and deaths in the country remained a concern among investors.
“Indian indices, led by financials, came back strongly from yesterday’s indecisiveness, amidst positive global cues. The global positive sentiment was driven by additional stimulus measures from ECB,” said Vinod Nair, Head of Research, Geojit Financial Services.
“Investors need to be a bit cautious since valuations are running high and the expected recovery is not yet visible in the numbers,” he added.
Banks contributed the most to the 307-point rally in BSE barometer Sensex. Top private lender HDFC Bank was the biggest contributor as it rose 3.14 per cent, while rival ICICI Bank gained 2.70 per cent.
The country’s biggest lender SBI jumped 7.90 per cent to emerge as top Sensex gainer after it posted a forecast-beating more than four-fold rise in its March quarter net profit at Rs 3,580.81 crore.
Peer Nifty rose 113 points to close at 10,142 points.
As many as 21 Sensex stocks logged gains. Engineering and construction firm Larsen & Toubro rose 2.61 per cent ahead of its March quarter earnings announcement.
BSE Sensex winners and losers (Source: bseindia.in)
Energy-to-telecom behemoth Reliance Industries (RIL) recouped most of the gains to end flat at Rs 1,580.60, up 0.04 per cent. The stock hit a record high of Rs 1,617.70 in early trade after the firm said Abu Dhabi-based sovereign investor Mubadala bought 1.85 per cent stake
for Rs 9,093.60 crore. This is the sixth deal for RIL in as many weeks.
The bulls were completely in charge as gainers were nearly four times the number of losers on the BSE.
Broader markets outperformed benchmark Sensex, with BSE mid and small-cap indices rising 1.79 per cent and 2.51 per cent respectively.
BSE Metal was the top sectoral gainer as it advanced 3.86 per cent, followed by BSE Telecom index which rallied 3.55 per cent. BSE IT, on the other hand, was the worst performer and shed 0.75 per cent.
Telecom major Bharti Airtel rose 2.05 per cent after Jefferies said the stock may rise 50-100 per cent over the next three years on a revenue boom in India’s telecommunications sector.
Biscuit maker Britannia recovered early losses and closed 0.29 per cent higher after the company refuted a report suggesting that Wadias were looking to sell shares through secondary block deals in open markets.
IT firm Hexaware Technologies rose 20 per cent as it said it was considering a buyout proposal from promoter HT Global IT Solutions Holdings.
For the year to date, foreign institutional investors (FIIs) have been net sellers of Indian shares to the tune of $5.8 billion, while domestic institutional investors (DIIs) pumped in a net of Rs 75,993.25 in the asset class.
Globally, stocks rallied as investors focused on government stimulus and shrugged off an upcoming US jobs report that is expected to show the highest unemployment since the 1930s. Airlines, automakers and hotels led gains among European equities as investors scooped up beaten-up shares. The Stoxx 600 Index is heading for its best week in two months and U.S. futures pointed higher.
Sensex rallies 307 pts as financials gain; Nifty tops 10,150
Equity benchmark Sensex rallied 307 points on Friday, propelled by gains in index-heavyweights HDFC Bank, ICICI Bank and SBI. After hitting a high of 34,405.43, the 30-share index settled 306.54 points or 0.90 per cent higher at 34,287.24. Similarly, the NSE Nifty rose 113.05 points or 1.13 per cent to 10,142.15.
MARKET AT A GLANCE
- Sensex up 0.90% or 307 points at 34,287
- Nifty gains 1.13% or 113.05 points to 10,142
- Total 21 Sensex stocks close higher
- Top Sensex gainers: SBI up 7.90%, Tata Steel 6%
- Top Sensex losers: TCS down 2.19%, HUL down 1.56 %
- Bulls back in charge; advance-decline ratio at 4:1 on BSE
- Sectoral space: BSE Metal index top gainer, rises 3.86%; NALCO up 7.70%, SAIL 7.40%
- BSE Telecom up 3.55%; Vodafone Idea jumped 21.90%, Tejas Networks 10%
- BSE IT top loser, sheds 0.75%; Subex down 4.99%, Kelltox Tech 3.23%
- BSE Midcap gains 1.79%, BSE Smallcap 2.51%
- RIL ends flat after recording new high of Rs 1,617.70
- L&T up 2.61% ahead of Q4 results
- Hexaware jumps 20% as co mulls going private
WHO MOVED MY MARKET
- Rally in banking stocks
A late surge in banking stocks, led by robust earnings from SBI drove the markets higher. Banking and financial stocks were the key contributors to the gains for frontline indices.
“We feel the banking index still has steam left and that could help the index to inch higher alongside others. However, any negative development on the global front might derail the momentum. Traders should continue with “buy on dips” approach with a focus on stock selection,” said Ajit Mishra, VP – Research, Religare Broking.
- Firm world markets
World stocks held their ground near three-month highs as the euro hit its highest level since March 10, thanks to Europe’s stimulus boost, fuelling hopes for a global rebound, Reuters reported. MSCI’s broadest index of Asia-Pacific shares outside of Japan rose 0.7 per cent, reversing early losses to stay near a 12-week top, while he pan-European STOXX 600 jumped 1.3 per cent.
- Continued record spike in Covid cases
Amid all the positivity in the market, the continued record jumps in Covid-19 infections in the country is worrisome. India witnessed the biggest jump in COVID-19 count with 9,851 new cases in the last 24 hours to 2,26,770. The fatalities from COVID-19 infection increased to 273 on Thursday — the highest number of deaths in a single day. The deadly coronavirus claimed 6,348 lives so far in the country.
WHAT TO WATCH OUT FOR
- The speed of rising coronavirus cases will also be keenly watched.
- Investors will keep a close watch on civil unrest in the USA.
- The developments over deteriorating US-China ties will be closely watched.
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