Global relief rally, banks lift Sensex 195 pts, Nifty above 10K; Midcap at record close
Benchmark indices as well as broader markets saw a relief rally on Monday, with the Nifty closing above 10,000 level for first time since August 7 following upside in global peers. No fresh missile test from North Korea, which was expected to be over the last weekend, boosted sentiment globally.
After a consolidation in previous session, the 30-share BSE Sensex closed up 194.64 points at 31,882.16 and the 50-share NSE Nifty rallied 71.25 points to 10,006.05, aided by private banks, infrastructure, FMCG and oil stocks.
Experts expect the upside to continue in coming trading sessions and the Nifty to march towards its previous record high of 10,137.85 hit on August 2.
“Valuations are high for the short term, but from a 2-3 years perspective, we believe that Indian markets are reasonable and can give returns higher than mid-teens,” AK Prabhakar, Head -Research at IDBI Capital told Moneycontrol.com.
He further said, “We are confident of the improvement in earnings growth benefiting from the reforms taken by the Indian government. We believe that the improvement in the structural story in India from FY19 onwards would still remain very much intact.”
The broader markets also rallied 0.7 percent, with the Nifty Midcap index ending at fresh record closing high despite the gap narrowed between advances and declines in later part of the session. About 1,431 shares advanced against 1,224 declining shares on the BSE.
On the global front, Asian markets closed higher on fading risk aversion as the dollar clawed back losses. Japan’s Nikkei was up 1.4 percent and Hong Kong’s Hang Seng gained 1 percent. European stocks – France’s CAC and Germany’s DAX were higher by 1 percent at the time of writing this article, following positive lead from Asia.
Back home, Nifty Bank gained the most among sectoral indices, up 301 points or 1.24 percent driven by IndusInd Bank, HDFC Bank and Yes Bank.
IndusInd Bank was biggest gainer among Nifty stocks, rising 5.6 percent to end at record closing high of Rs 1,790.65 after signing exclusivity agreement with microfinance company Bharat Financial Inclusion for proposed potential strategic combination by way of amalgamation through a scheme of arrangement, or any other suitable structure.
Bharat Financial Inclusion share price also hit fresh 52-week high intraday post the management said the company will get merged with IndusInd after the due diligence & terms are agreed. The stock was up 3.3 percent.
Cadila Healthcare plunged 5 percent on worry over increased competition for Lialda generic. Irish-headquartered company Shire Plc has launched its authorised generic (AG) version of Lialda.
Larsen & Toubro rallied 4 percent again, on top of 4 percent upside seen in previous trading session. Citi on last Friday raised target price of the top industrial pick to Rs 1,452 apiece from Rs 1,341 earlier.
Private sector lenders HDFC Bank (up 2 percent) and Yes Bank (up 3 percent) hit fresh record highs intraday.
Maruti Suzuki was up 2 percent after the GST Council on last Saturday increased cess on mid-size cars by 2 percent, big cars by 5 percent and SUVs by 7 percent. However, M&M lost a percent.
Gas related stocks Petronet LNG (up 5.8 percent) and GAIL (3.87 percent) saw buying interest after India has renegotiated a pricing of contract agreed in 2009 for around 1.5 million tonnes a year of LNG from ExxonMobil’s share of the Gorgon LNG project in Australia.
Among other largecaps, Asian Paints, HUL, Tata Power and Tech Mahindra were up 1-5 percent while Infosys, TCS, ICICI Bank, Sun Pharma and SBI were under pressure.
Shoppers Stop rallied 6.5 percent after a media report indicated that Future Group is looking to buy Hypercity.
Jaiprakash Associates and Jaypee Infratech fell 5-6 percent after the Supreme Court asked interim resolution professional (IRP), a body formed by NCLT, to take over management of Jaypee Infratech and it directed Jaypee Associates to deposit Rs 2,000 crore in apex court.
