Banks, Infosys lift Sensex 276 pts and Nifty above 9850; Midcap outperforms
Bulls were back in action on Wednesday as the Sensex rallied more than 300 points intraday, driven by banking & financials and index heavyweights Infosys & Reliance Industries. The rally came despite sluggish global cues.
The 30-share BSE Sensex was up 276.16 points or 0.88 percent at 31,568.01 and the 50-share NSE Nifty surged 86.95 points or 0.89 percent to 9,852.50.
The broader markets outperformed benchmarks as the BSE Midcap and Smallcap indices rallied more than 1.1 percent on positive breadth. About two shares advanced for every share falling on the BSE.
Market experts feel this relief rally is unsustainable because of subdued global environment and disappointed earnings.
Geoffrey Dennis, Head, Global Emerging Market Strategy at UBS said the market is in a modest consolidation phase, but he does not expect a major correction.
He is overweight on India amongst global emerging market portfolio as he expects 12 percent earnings per share (EPS) growth in FY18 and 15 percent EPS growth in FY19.
All sectoral indices barring FMCG closed in green, with Realty (up 3.4 percent) and PSU Bank (2.09 percent) rising the most.
The rally was seen across banks, especially after Cabinet approved alternative mechanism for the PSU banks merger. Allahabad Bank, Union Bank, PNB, OBC, Bank of India, Syndicate Bank, Andhra Bank, SBI and BoB rallied 1-4 percent.
Among private ones, HDFC Bank, ICICI Bank and Kotak Mahindra Bank also participated in the rally, up 1-1.7 percent.
Index heavyweights HDFC and Reliance Industries also supported the market, rising 1 percent each.
IT bellwether Infosys closed with gains of 2 percent as sources told CNBC-TV18 that Co-founder Nandan Nilekani is likely to return at the helm of affairs at the company.
Bharti Airtel was up 2.4 percent as it added 6 lakh new users in July 2017 while other four private telecom operators, including Idea Cellular and Vodafone, lost 43.7 lakh customers.
DLF shares rallied 6 percent as the board of directors in a meeting on August 25 will consider the status of proposal to sell 40 percent stake in rental arm to investment firm GIC.
Fortis Healthcare rose nearly 8 percent as ace investor Rakesh Jhunjhunwala’s wife Rekha bought 45 lakh shares through a block deal on Tuesday.
Non-banking finance companies like LIC Housing, Ujjivan Financial, Capital First, Canfin Homes, Bajaj Finance etc were in demand, up 3-6 percent.
Indo Count Industries shares rallied 9 percent after the company in its clarification note said it has not lost any customers. “We strongly deny the rejection of orders by any of our customers. These rumours are totally false and baseless,” it said in its filing.
Global markets were mixed as traders paused for breath after a global rally spurred by gains for tech stocks in the US.
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