Banking stocks fuel indices’ steep jump
Asian rally too helps Indian markets’ biggest surge in 2 weeks
The domestic markets on Monday posted their biggest jump in nearly two weeks, led by gains in banking stocks and the rally in Asian markets amid a retreat in US bond yields. The drop in Covid19 tally in Mumbai over the weekend also boosted sentiment, although cases continued to mount across the country.
The benchmark Sensex closed at 48,386, with a gain of 508 points or 1.06 per cent—most since April
13. The Nifty ended the session at 14,485, with a gain of 143 points, or 1 per cent.
Strong earnings by private sector lender ICICI
Bank buoyed banking stocks. Shares of ICICI
Bank rose 3.6 per cent, Axis
Bank surged 4.4 per cent, and State Bank of India gained 2.4 per cent. Index heavyweight Reliance Industries rose 1.74 per cent after it commenced production from the second deep-water gas field.
Overall, 194 stocks hit their 52-week high, and 367 were locked on the upper circuit on the BSE. The market breadth was positive, with 1,867 stocks advancing and 1,132 declining. Four-fifths of the
Sensex constituents gained. Axis Bank was the best performing Sensex stock and rose 4.4 per cent. ICICI Bank and Ultratech Cement rose 3.6 per cent each. Realty and metal stocks were the biggest gainers, and their sectoral indices rose 3.7 and 2.1 per cent, respectively.
“Buying interest was broad-based, led by banking, realty, and metal stocks, with a hope that we are nearing the peak of infection. Banking stocks outshone other major sectoral indices due to the positive beginning of quarterly results,” said Vinod Nair, head of research at Geojitfinancialservices.
The 10-year US Treasury yield has declined nearly 20 basis points this month. This has boosted prospects for the emerging markets. However, global investors have been cautious due to the renewed surge in Covid-19 infections.
“Upbeat global cues combined with supportive earnings are helping the index hold at higher levels despite Covid challenges. The recent news of various countries extending help to India in the fight against Covid further boosted sentiment. Banking, metal, and pharma are showing tremendous resilience and should be preferred for long trades on dips,” said Ajit Mishra, VP- research, Religare Broking. Analysts expect the markets to remain volatile amid rising Covid-19 tally, derivatives expiry, the upcoming meeting of the US Federal Reserve, and a slew of corporate results.