Market at record close, Sensex gains 205 pts; Nifty Bank above 25K on rate cut hope
The market extended last week’s rally on Monday as equity benchmarks ended at fresh record closing highs, with the Nifty closing above 10,050 level for the first time. Hope of rate cut in the upcoming monetary policy review on August 2 and reduction in saving interest rate by SBI led the rally.
The 30-share BSE Sensex surged 205.06 points to 32,514.94 and the 50-share NSE Nifty gaiend 62.60 points at 10,077.10 despite weak market breadth. It was driven by banks, technology, oil and infra stocks but pharma and FMCG stocks were under pressure.
“We reiterate positive view on markets and suggest continuing stock specific trading approach. Rate sensitive pack will remain in focus,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
According to him, traders should restrict their positions only in highly liquid and fundamentally sound counters. Extra caution is advisable while choosing stocks from midcap & smallcap space, he said.
The broader markets underperformed benchmarks, with the BSE Midcap index up 0.4 percent. About 1,443 shares declined against 1,258 advancing shares on the exchange.
Meanwhile, the two-day meeting of monetary policy committee will begin on August 1 and will announce the conclusion on August 2.
Majority of experts as well as economists expect 25 basis points rate cut that helped the Nifty Bank end above 25,000-mark for the first time, up 1.18 percent at 25,103.65.
Other reason for rally was the State Bank of India that introduced a 2-tier saving bank interest rate structure with effect from today.
“The balance above Rs 1 crore will continue to earn interest at 4 percent per annum, while interest at 3.5 percent per annum will be offered on balances of Rs 1 crore and below,” the country’s largest lender said.
The stock surged 4.5 percent followed by ICICI Bank, Kotak Mahindra Bank, HDFC Bank, Axis Bank, Bank of Baroda and Punjab National Bank that gained up to 2.5 percent.
Tech Mahindra gained 1.4 percent ahead of Q1 earnings that announced after market hours. The IT company beat analysts’ expectations on all parameters, with dollar revenue growing 0.6 percent and EBIT margin expansion of 120 bps in QoQ.
Larsen & Toubro surged nearly 3 percent as analysts maintained their bullish stance on the stock after stable earnings and full year guidance maintained.
Lupin fell 3 percent despite positive news. The pharma major said Pithampur unit (Madhya Pradesh) inspection concluded by US FDA without any observations and Aurangabad facility inspection completed with one observation but that observation corrected during inspection itself.
Among others, Reliance Industries, Infosys, Maruti Suzuki, ONGC, Tata Steel and Bharti Airtel rallied 1-3 percent whereas ITC, Sun Pharma, Dr Reddy’s Labs and Cipla were down 1-3 percent.
In broader space, Shree Cement, Torrent Pharma, Balrampur Chini, Shriram Transport, UPL and Coromandel International gained up to 7 percent post earnings.
V-Guard Industries, CDSL, Eros International and Bhageria Industries tanked 11 percent after June quarter earnings.
Infibeam Incorporation surged 8.5 percent after Gurgaon-based e-commerce firm Snapdeal has terminated all talks for a distress sale to its arch rival Flipkart and wants to pursue an independent path.
European markets were moderately higher at the time of writing this article. Asian markets closed mostly higher as investors digested weaker-than-expected China PMI data.
