Sharp rise due to 109.57-billion euro rescue package for Greece, gain in banking shares.
The stock market today rose sharply on positive global cues and gain in banking shares. The Bombay Stock Exchange (BSE) Sensex rose 286 points or 1.5 per cent to close at 18,722. The broader index S&P CNX Nifty of the National Stock Exchange (NSE) rose 92 points or 1.67 per cent at 5,633.
The 109.57-billion euro rescue package for Greece pepped risk appetite for equities and indices across Asia. Japan’s Nikkei Stock Average gained 1.2 per cent. Hong Kong’s Hang Seng Index jumped 2.1 per cent and China’s Shanghai Composite surged 0.2 per cent. Gains in banking shares were largely as Axis Bank reported better than expected results and a 27 per cent growth in net profits. Axis Bank stock rallied five per cent after the results to end at Rs 1,296. Union Bank was up five per cent, YES Bank gained 3.7 per cent and ICICI Bank rose 2.6 per cent, pulling the BSE Banking index up by 2.2 per cent.
Going forward, markets will take cues from Reliance Industries earnings on Monday and the Reserve Bank of India’s tightening of policy on Tuesday. Economists are expecting RBI to pause the rate rise cycle when it meets on Tuesday, after raising these another 25 bps. The government has raised interest rates 10 times in the last one year to contain high levels of inflation.
“There can be some headwinds for the markets from the current levels and 5,717, which is a 200-day moving average for Nifty, will act as major resistance. The market has already factored in a 25-bps rate hike from the Reserve Bank of India next week. If it is more than that, it could be negative,” said Alex Mathews, head of research at Geojit BNP Paribas Securites.
Among individual stocks, Bharti Airtel ended at Rs 411, up four per cent after touching a 52-week high of Rs 412, after reports of a rise in call rates by 20 per cent to 1.2 paise from 1 paise per second in some circles.
Reliance Industries surged 1.5 per cent to Rs 873 on expectations of a cabinet nod for the RIL-BP deal worth $7.2 billion. The oil & gas conglomerate is also expected to report 15 per cent growth in net profit to Rs 5,600 crore, led by 29 per cent growth in net sales for the June quarter.
Rate-sensitive auto shares were also among the top gainers. The index advanced 1.7 per cent. Mahindra & Mahindra was up three per cent, Ashok Leyland gained 2.6 per cent and Tata Motors added 2.2 per cent.
Top gainers on the Sensex were Reliance Communication, up 3.4 per cent, Infosys 2.1 per cent and Bajaj Auto rallied two per cent. Only three components on the Sensex ended in the red; DLF was down 0.4 per cent, Hindalco Industries slipped 0.3 per cent and Jindal Steel declined 0.1 per cent.
From the broader markets, the midcap index surged 1.3 per cent and the smallcap index added 0.2 per cent. Market breadth was positive, as 1,715 stocks advanced against a decline of 1,188 stocks.