Market ends at 2-year high, Sensex up 216 pts; RIL above Rs 1300
Mon Mar 06 2017
Ramesh Sridharan (877 articles)

Market ends at 2-year high, Sensex up 216 pts; RIL above Rs 1300

Bulls were back in power as the market gained strength and ended at two-year closing high on Monday after consolidation in the passing week, supported largely by Reliance Industries. GST Council’s approval to central GST & integrated GST laws over the weekend boosted sentiment. Hopes of favourable results for BJP could be another reason for market rally.

The 30-share BSE Sensex gained 215.74 points at 29,048.19, the highest closing level since March 5, 2015. The 50-share NSE Nifty rose 65.90 points to 8963.45 despite mixed global cues, which is 33 points away from its record closing level.

Experts expect the rally to continue till exit polls for assembly elections. They feel the Nifty may hit record high, if the BJP wins UP elections.

Strong liquidity as well as positive outlook will push the market higher, market expert Dipan Mehta says, adding more than the foreign investors, it is domestic savings that is driving the market.

If the market corrects post UP elections results on March 11, it will be a great buying opportunity, he believes.

Pramod Gubbi of Ambit Capital sees limited downside for the market as there is no immediate reason for reversal of the ‘sticky’ domestic flows.

The broader markets underperformed benchmarks, with the BSE Midcap rising 0.57 percent. The market breadth was almost balanced as about 1514 shares advanced against 1401 declining shares on the BSE.

Reliance Industries, the biggest contributor to benchmark indices’ gain, ended at nine-year high of Rs 1,304.90, up 3.69 percent as analysts expect contribution from telecom and energy businesses to boost revenue growth in coming years.

Bharti Airtel shares gained 1.81 percent after the company announced merger of Millicom operations with itself in Ghana. With this merger, Deutsche Bank believes Bharti is progressing well towards PAT breakeven in Africa in the medium term.

Technology stocks were under pressure after the US Citizenship and Immigration Services (USCIS), the agency that oversees lawful immigration to the US, on Saturday announced that it will temporarily suspend premium processing of all H1B petitions. TCS was down 0.87 percent while Infosys recouped losses in last hour of trade as analysts don’t expect any major impact on operational cost of these companies.

Nifty Bank ended with nearly 1 percent gains as all banks stocks were in green. SBI, Bank of India, IndusInd Bank, PNB, Kotak Mahindra Bank and Axis Bank gained 1-2 percent.

Adani Ports, Asian Paints, Bajaj Auto, Hero Motocorp, BHEL and NTPC among others rallied 1-2.5 percent whereas HDFC, Dr Reddy’s Labs, Sun Pharma and HUL were under pressure.

Bharat Forge was up 2.7 percent after Class 8 truck orders in North America jumped 28 percent to 22,900 units YoY. Unichem Labs gained 3 percent as the company said two observations issued by US FDA for Ghaziabad unit but that would not impact business.

Markets in Europe were lower by half a percent as investors contemplated a rate rise by the US Federal Reserve. Asian markets ended mostly higher, dismissing earlier concerns about increased geopolitical risks in Asia after North Korea fired multiple ballistic missiles.

Ramesh Sridharan

Ramesh Sridharan

Ramesh Sridharan is our Stock Market Correspondent covering events and daily movements of stock markets in Asia. He is based in Mumbai