Sensex soars to 3-month high on earnings boost; banks, IT stocks rally
Indian equity markets continued their winning run for a third straight session, with the BSE benchmark Sensex rising 191 points to a near three-month high of 35,160, led by intense buying mainly in banking and IT stocks amid positive global cues and high optimism on corporate earnings.
The broader NSE Nifty too gained over 47 points to breach the psychological 10,700-level.
Market sentiment also got a boost after the Reserve Bank on Friday further liberalised external commercial borrowing (ECB) policy by including more sectors in the window, in a bid to facilitate easy access to overseas funds by the India Inc.
A higher opening in European markets and positive Asian cues, following last week’s historic North-South Korea summit, too fuelled optimism.
The gains on domestic bourses were led by financial and technology stocks as investors widened their exposure ahead of key corporate results.
“Market continued its winning streak led by positive global cues and RBI’s ease in rules for FPIs to invest in bonds. PSU banks outperformed in expectation of stability in yield while volume growth in bond market will provide relief to rupee,” Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.
Quarterly results so far have been better, contrarian bet IT industry is gaining investors’ attention owing to improving macros and strengthening dollar, he added.
The January-March quarterly results posted by companies so far are largely in line with market expectations.
Meanwhile, the Mortgage lender HDFC on Monday reported 28.63% rise in consolidated net profit at Rs 3,961.17 crore for the quarter ended March 31, 2018.
Driven by realty, capital goods, IT and banking stocks, the BSE Sensex reclaimed the 35,000-mark at the outset to hit a high of 35,213.30 before ending at 35,160.36, up 190.66 points, or 0.55%. This is its highest closing for the Sensex since February 1 when it had ended at 35,906.66.
The gauge had climbed 468.43 points in the previous two days.
For the 50-share NSE Nifty, the close came in at 10,739.35, higher by 47.05 points, or 0.44%, after shuttling between 10,759 and 10,704.60.
The two benchmark indices, BSE Sensex and NSE Nifty - remained well above their key levels of 35,000 and 10,700 levels points, respectively throughout the session as investors were optimistic about upcoming results from more companies.
Domestic financial institutions continued to hold ground and retail investors built up more bets amid a firming Asian trend.
Domestic institutional investors (DIIs) picked up shares worth a net Rs 633.71 crore on Friday. Foreign portfolio investors (FPIs) exited, pulling out shares amounting to Rs 759.21 crore on a net basis, showed provisional data.
Metal, realty, capital goods, healthcare, power, PSU and auto sector stocks were other major winners of the day.
In the Asian region, Hong Kong’s Hang Seng rose 1.74%. Taiwan up 0.99%, while Singapore rose 1.03%. Financial markets in Japan and China were shut for public holidays.
Key indices in Europe were in a better shape in their early session. Frankfurt’s DAX was up 0.22% and Paris CAC 40 gained 0.23%. London’s FTSE edged up 0.50%.
During the session, stocks of auto makers attracted investors’ attention ahead of sale numbers data for April.
Yes Bank continued its upward march and topped the BSE Sensex list by surging 3.90% to Rs 362.05 largely on the back of better-than-expected Q4 earnings posted last week.
Hindustan Unilever surged 2.34%, to Rs 1,509.05, followed by India’s largest IT firm TCS which went up 2.22% to Rs 3,531.40.
HDFC Ltd shot up by 1.44% to Rs 1,884.65 after the company today posted 29% growth in its net profit at Rs 3,961.17 crore for the fourth quarter.
Other big movers were Kotak Bank, L&T, SBI, HDFC Bank, Wipro, Asian Paint, M&M, Adani Ports, Tata Motors, Infosys, NTPC, Dr Reddy’s, ITC Ltd, Tata Steel, Sun Pharma, IndusInd Bank, Bharti Airtel, Maruti Suzuki, Bajaj Auto and Hero MotoCorp.
Shares of Reliance Industries, however, fell 3.18% after it announced plans to shut oil and gas production at its main fields in KG-D6 block in the coming months and begin complying with the government’s guidelines for decommissioning facilities in the Bay of Bengal block where output has hit its lowest ever.
The company on Friday reported a 17.3% jump in its fourth quarter net profit on the back of robust petrochemicals margins and telecom arm Jio’s maiden profits.
Axis Bank fell 3.87% on weak earnings declared last week, making it the biggest loser on the BSE Sensex.
As for sectoral indices, the BSE realty took the lead by rising 1.50%, followed by capital goods at 1.48%, IT (1.44 pc), FMCG (1.35 pc), Teck (1.10 pc), Infrastructure (0.91 pc), Power (0.89 pc), Healthcare (0.84 pc), Bankex (0.43 pc), Auto (0.39 pc), PSU (0.37 pc) and Metal (0.32 pc).
Broader markets such as small-cap and mid-cap indices too rallied in step with key indices, surging by 0.89% and 0.56%, respectively