Banks, RIL push Nifty above 8900; Axis jumps 5%, Bharti dips 3%

The market gained strength in last hour of trade after consolidation on Tuesday, with the Nifty closing above the psychological 8900-mark driven by banks on Axis Bank merger talks and Reliance Industries post Jio tariff plans.

The 30-share BSE Sensex gained 100.01 points at 28761.59, continuing uptrend for the fourth consecutive session. The 50-share NSE Nifty rose 28.65 points to 8907.85, the highest closing level since September 8, 2016.

Gautam Shah of JM Financial feels the markets are now at a major inflection point. He sees little possibility of indices hitting life time highs in the current run.

Shah believes after hitting 8900 level on the Nifty, there could be a retracement all the way down to 8650 or even 8450-8500. “Such retracement, if it happens, will help build a higher base and set the ball rolling for a move towards lifetime highs,” he says.

GV Giri of IIFL Institutional Equities says even as the optimism around India is quite high, foreign investors are treading cautiously, choosing to wait for fourth quarter earnings before taking investment calls. Barring a couple of markets, India has outperformed most emerging markets this year, he adds.

The broader markets also gained in line with benchmarks. The Nifty Midcap ended at record closing high, up 0.6 percent. The Nifty Smallcap index also gained 0.6 percent.

Banks were main leaders in today’s rally, with the Nifty Bank index up 0.9 percent and the major contribution came from Axis Bank.

Axis Bank shares surged 5 percent. Kotak Mahindra Bank is learned to have approached the government seeking a merger with country’s third largest private sector lender Axis, sources have told CNBC-TV18. According to them, the move has sparked an interest from other industry players as well, including HDFC Bank, HDFC, ICICI Bank and IndusInd, who have all approached the government informally expressing an interest in picking up stake in Axis.

The rally also spilled over to other banks – ICICI Bank rose 1 percent. HDFC Bank was up 0.4 percent and SBI gained 0.5 percent while HDFC rose 1.06 percent.

Reliance Industries gained 1.4 percent after Chairman and Managing Director, Mukesh Ambani announced Reliance Jio’s tariff plans with the aim to cover 99 percent population by 2017-end. The Jio will start offering tariff plans with effect from April 1. However, its peers Bharti Airtel and Idea Cellular were down 3.4 percent and 0.4 percent, respectively.

Aurobindo Pharma shares rose 2.4 percent after sources told CNBC-TV18 that US Food & Drug Administration has completed inspection of unit 11 with zero observations.

Among technology stocks, Credit Suisse says it likes Tech Mahindra as the revival in growth momentum is already visible and valuations are attractive. The stock was up 1.6 percent.

TCS shares fell 1.7 percent on profit booking. ITC, Sun Pharma and Maruti were down 0.5-1 percent while Asian Paints, Tata Motors, HUL and ONGC were gainers among largecaps.

In broader space, IDBI Bank advanced 0.7 percent after the board of directors approved in-principle, the proposal to divest some of its non-core investments.

APM Industries shares rallied 9 percent after the Reserve Bank of India has granted a non-banking finance company license to company’s wholly owned subsidiary APM Finvest.

Bank of Maharashtra spiked 14 percent as the public sector lender decided to lower operational expenses by merging loss-making branches & cutting zonal offices in FY18.

Max Financial lost 4 percent after 1.5 crore shares (representing 5.7 percent of paid-up equity capital) worth Rs 890 crore traded on NSE at Rs 569.70 apiece via block deal. Sources say Goldman Sachs’ subsidiary GS Mace was likely to sell stake in the company via block deal today.

United Spirits gained 3 percent after sources told CNBC-TV18 Diageo may finalise plans on open offer this week.

The market breadth was not that strong today. About 1553 shares advanced against 1277 declining shares on the Bombay Stock Exchange.

Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes