Banks, fin stocks lift sen­sex by 646 pts

The Times of India (New Delhi edition) - - Times Global - TIMES NEWS NETWORK

Mum­bai: Af­ter slid­ing for six ses­sions, the sen­sex re­versed the trend as strong buy­ing emerged in bank­ing and fi­nan­cial ser­vices stocks due to falling gilt yields, which could lead to higher prof­its for lenders. The sen­sex opened flat but gained through the ses­sion to close at 38,178 — up 646 points or 1.7% on the day.

In the process, global fac­tors like un­cer­tainty about a trade deal be­tween the US and China, and signs of a slowing global growth rate were pushed onto the back burner, bro­kers said.

The de­ci­sion by the govern­ment to hike dear­ness al­lowance (DA) for its em­ploy­ees from 12% to 17% also helped the rally as this step could help con­sumer goods com­pa­nies. Ac­cord­ing to HDFC Se­cu­ri­ties head (re­tail re­search) Deepak Jasani, the gains came on the back of bar­gain hunt­ing. “Sen­ti­ments also turned pos­i­tive af­ter the govern­ment on Wed­nes­day hiked DA by 5 per­cent­age points, en­tail­ing an outgo of Rs 16,000 crore. This move will ben­e­fit at least 50 lakh govern­ment em­ploy­ees and 65 lakh pen­sion­ers,” Jasani said.

The day’s trade added about Rs 1.8 lakh crore to in­vestors’ wealth with the BSE’s mar­ket cap now at Rs 143.5 lakh crore. Among the sen­sex stocks, HDFC Bank, ICICI Bank, Ko­tak Bank and HDFC to­gether con­trib­uted about 60% of the gains, while lower clos­ings for ITC, TCS and In­fosys lim­ited the in­dex’s gains par­tially, BSE data showed.

In­ter­est­ingly, the strong gains came de­spite for­eign in­vestors con­tin­u­ing to be sell­ers in the mar­ket with a net out­flow fig­ure of Rs 485 crore, ac­cord­ing to BSE numbers. Do­mes­tic funds on the other hand were net buy­ers at Rs 956 crore.

Mean­while, in the forex mar­ket, the In­dian cur­rency re­couped most of its losses dur­ing the day to set­tle marginally in the red. At the in­ter­bank for­eign ex­change mar­ket, the ru­pee opened strong at 71.20 against the US dol­lar. Dur­ing the day, the do­mes­tic unit fluc­tu­ated be­tween a high of 70.94 and a low of 71.22. The lo­cal unit fi­nally set­tled at 71.07, down 4 paise over its Mon­day close of 71.03.

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