India : Q1 earnings boost Sensex 293 pts; SBI soars 7%, Sun Pharma falls

PSU banks’ better quarterly earnings as well as consistent inflow of foreign money boosted sentiment on Friday, pushing the market one percent higher ahead of factory data and retail inflation due later today. Positive Asian cues following record closing on the Wall Street yesterday and further short covering also supported the equity benchmarks.The 30-share BSE Sensex surged 292.80 points or 1.05 percent to 28152.40 and the 50-share NSE Nifty gained 80 points or 0.93 percent at 8672.15. The BSE Midcap also traded in line with benchmarks but the Smallcap index closed off day’s high due to negative market breadth.

Experts advise profit booking at current levels as they believe most of news is already priced into the market that rallied more than 22 percent since March on more than Rs 51,000 crore worth of FIIs buying.

“If the markets were to continue to rally, then cash levels could again start moving quite higher and we will continue to trim out of stocks,” Nilesh Shetty of Quantum AMC said.

Benchmarks closed flat on weekly basis as the recovery in later part of the week offset initial losses due to profit booking after the RBI policy.

Country’s largest lender State Bank of India shares surged more than 7 percent after sharp fall in fresh slippages and stable asset quality in June quarter. Profit fell 31.7 percent year-on-year to Rs 2,520.96 crore but sequentially increased two-fold. Overall earnings met analysts’ expectations.

Bank of India (up over 10 percent), Oriental Bank of Commerce (up 4 percent), Dena Bank (up 3.3 percent) and Central Bank of India (down 1.8 percent) also reacted to quarterly earnings.

Earnings from healthcare sector were mixed as Sun Pharma fell nearly a percent despite better growth in earnings while Glenmark gained 1 percent after strong performance in Q1. Cipla, which announced earnings after market hours, fell 1.3 percent.

Hindalco Industries gained 2.8 percent as profit in June quarter jumped 5-fold to Rs 294 crore on strong operational performance.

Aditya Birla Nuvo shares crashed 18 percent, though Grasim Industries recouped intraday losses to close half a percent higher after mega restructuring announced by the Aditya Birla Group. Aditya Birla Nuvo will be merged with Grasim and financial business of the former one will be demerged into Aditya Birla Financial Services.

Shares of HDFC, Reliance Industries, Axis Bank, Tata Motors and M&M were other top gainers among Sensex 30, up 2-4 percent while Infosys fell over a percent.

About 1397 shares declined against 1261 advancing shares on the Bombay Stock Exchange.

On the global front, Asian markets ended mostly higher despite disappointing deluge of economic data from China. Japan’s Nikkei was up 1.1 percent and China’s Shanghai gained 1.6 percent. European stocks were mixed at the time of writing this article.