India : Sensex off day’s high, up 265pts on short covering global cues
Equity benchmarks staged a smart recovery on Thursday with the Sensex surging 491-point intraday but trimmed gains in late trade due to further selling in technology & auto stocks and heavyweight HDFC. The rally was supported by short covering as well as value buying in banks & metals stocks, and positive global cues.The 30-share BSE Sensex was up 265.15 points or 0.97 percent at 27517.68. The 50-share NSE Nifty rose 93.75 points or 1.11 percent to close at 8525.75 after hitting an intraday high of 8598.45.
The rally across the globe indicated that the market fully priced in an unexpected victory of Donald Trump in US presidential elections, believe analysts who expect consolidation in near term.
Despite all the recent developments, Jayant Manglik of Religare Securities suggests maintaining cautious stance as upside seems capped in Nifty. He says he feels possibility of further consolidation in quite high in index; however, traders will continue to find ample opportunity on stock specific front.
Rahul Chadha of Mirae Asset Global Investments (HK) expects the next 18 months to be good for global equities. He says overall risk premium will increase in equities over two-three years.
European bourses were higher as they continue to rebound following Donald Trump’s victory in the US election. France’s CAC, Germany’s DAX and Britain’s FTSE gained 1 percent each at the time of writing this copy. Asia ended sharply higher with the Nikkei rising nearly 7 percent.
Back home, the broader markets also came off day’s highs but maintained outperformance over benchmarks. The BSE Midcap and Smallcap indices gained around 1.7 percent on positive breadth. About 2019 shares advanced against 732 declining shares on the exchange.
Nifty PSU Bank and Metal indices gained the most by 8.7 percent and 6 percent, respectively. The rally in banks may be on account of likely improvement in asset quality going ahead while technology stocks remained under pressure on Trump’s victory.
State Bank of India, Tata Steel, Bank of Baroda and Hindalco Industries surged 8-9 percent ahead of quarterly earnings later in the week.
Among others, ICICI Bank, HDFC Bank, Axis Bank, Adani Ports, Cipla (after earnings), Coal India and Bharti Airtel rallied 2-7.5 percent whereas HDFC, Asian Paints, Infosys, Lupin, Maruti Suzuki, TCS and Hero Motocorp fell 1-3.5 percent.
In broader space, Bank of India gained 13 percent after reporting profit of Rs 126.8 crore in Q2FY17 against loss of Rs 1,126.2 crore in Q2FY17 and even slippages fell to Rs 3,963 crore from Rs 6,233 crore on sequential basis.
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