With the Government’s pro-market moves like capital infusion for banks and participation of Employees’ Provident Fund Organisation (EPFO) into the equity markets, the benchmark index Sensex shot up an impressive 409 points on Friday, powered by almost all banking stocks. The index regained the psychological level of 28,000 by hitting the day’s high of 28,161.17 before closing at 28,114.56, up 409.21 points, or 1.48 per cent.
The market witnessed a total turnover of Rs3,927.59 crore from Rs3,359.07 crore on Thursday. This was the best single-day gain over a month. A healthy set of quarterly numbers from leading private lender ICICI Bank also gave the mood a big lift.
Besides, market experts believe that the market is upbeat due to RBI’s rate cut hope and Q1 FY16 earnings that shows the growth of the asset quality of banks. “There are two immediate factors which are causing the current market surge. First, there is the hope of a cut in interest rates in the forthcoming RBI policy meet on August 4. Second, there are signs from Q1 FY16 results that the asset quality of banks is improving,” said Vinod Nair, Head, Fundamental Research, Geojit BNP Paribas Financial Services.
Intra-day, the NSE Nifty too climbed to a high of 8,548.95, regaining the crucial 8,500-mark. It ended the day higher by 111.05 points, or 1.32 per cent, at 8,532.85. On a weekly basis, both BSE Sensex and NSE Nifty ended largely flat.
Banking shares were in the driver’s seat throughout. The state-owned SBI was the top gainer (up 5.25 per cent). ICICI Bank climbed 3.97 per cent after it reported a 12 per cent growth in net profit for the June quarter. Even Axis chipped in.
Coal India, lupin, Dr Reddy’s Hero MotoCorp too advanced. Out of the 30 Sensex stocks, as many as 25 flashed green. From a sectoral perspective, realty and healthcare were the showstoppers, which rose up to 2.89 per cent. Power and oil and gas fell up to 0.60 per cent.
Broader markets like mid-cap and small-cap indices ruled firm, which gained up to 1.03 per cent. Globally, Asian peers closed the day with gains while European indices were little changed in their early trade following mixed earnings scorecard.
“Being the first day of August F&O series and on improved global cues, the markets were up on Friday. Better-than-expected quarterly numbers also supported the domestic markets along with the news that the government plans to infuse Rs70,000 crore in PSBs over the next four years,” said Alex Mathews, Head, Research, Geojit BNP Paribas Financial Services.
Meanwhile, foreign portfolio investors (FPIs) net sold shares worth Rs170.68 crore yesterday, provisional exchange data showed. The market breadth remained strong as 1,658 stocks ended in the positive zone, 1,214 finished in the red while 129 stayed steady.