Banking stocks help indices log biggest single-day gain in three weeks

Sensex rises 2.1%, Bankex surges 3.8% after SC directions in AGR case

A sharp rally in banking shares helped the benchmark indices log their biggest single-day gain in nearly three weeks. The benchmark Sensex gained 700 points, or 2.1 per cent — the most since June 1 — to end at 34,208, while the Nifty 50 index rose 210.5 points, 2.13 per cent, to end at 10,092.

The BSE Bankex surged 3.8 per cent, led by strong buying in firms like HDFC Bank, Kotak Mahindra Bank, Axis Bank, and State Bank of India. Other index heavyweights such as Reliance Industries and ITC also posted over 2.5 per cent gain. The gains in these influential counters helped the market offset Fitch’s rating cut, surging Covid-19 infections, and rising tensions between India and China.  
 

Market players attributed the rally to the favourable directions issued by the Supreme Court in the adjusted gross revenue (AGR) matter.

The apex on Thursday directed telecom companies to provide their financial documents, and gave the Depar­t­ment of Telecommu­nica­tions (DoT) time till the third week of July to consider the firms’ proposals on making payment towards the AGR dues. The DoT also withdrew 96 per cent of the Rs 4 trillion AGR demand against state-owned non-telecom firms. “The Supreme court AGR ruling provided a respite to banks, especially those who have exposure to telcos. The banking index contributed the most to the positivity, and almost all components of the index ended positively,” said Vinod Nair, head of research at Geojit Financial Service, adding that investors should be cautious given several headwinds. The launch of the auction for 41 coal blocks for commercial mining by the central government in a bid to open the sector for private players also boosted sentiment, said experts. Shares of Coal India rallied 6 per cent.

 

 

“This will boost domestic coal output and slash imports. Apart from attracting huge capital investments, it could result in these mines contributing 15 per cent of projected total coal output in FY26,” said Deepak Jasani, head of retail research at HDFC Securities.

“The rally is surprising. The Covid-19 numbers are rising and tensions with China persist. One can understand the relief rally in banking stocks, but the whole market moving up is a Chinese puzzle,” said G Chokkalingam, founder of Equinomics. Ajit Mishra, vice-president, Religare Broking, said developments in the stand-off with China and cues from global markets would remain on participants’ radar. “Since all the sectors contributed to the move, traders should maintain their focus on stock selection,” Mishra said.

The market breadth was positive, with 1,889 stocks advancing and 724 declining on the BSE. All Sensex components, barring eight, ended the session with gains. Bajaj Finance was the best-performing stock and rose 5.5 per cent. Kotak Mahindra Bank, Axis Bank, and HDFC Bank rose 5 per cent, 4.1 per cent, and 4 per cent, respectively. All BSE sectoral indices, barring two, ended the session with gains. Banking and Finance stocks gained the most, and their sectoral indices rose 3.8 per cent and 3.6 per cent, respectively.