Markets end flat; SBI gains over 2% as banking stocks rally

Benchmark indices settled on a flat note tracking mixed cues from global peers after ECB unexpectedly reduced its monthly asset buys but pledged to keep its quantitative easing (QE) programme beyond 2017, if needed.

Nifty saw the biggest weekly gain since the first week of September and comfortably maintained its crucial 8250 levels in today’s session.

S&P BSE Sensex settled the day 53 points higher at 26,747 while Nifty50 gained 15 points to end at 8,262.  In broader markets, BSE Midcap gained 0.21% while BSE small cap was up 0.52%.

"Stocks added to previous day’s gains especially by the small and midcaps, but with FOMC likely to raise rates next week, Indian markets followed global cues in taking a cautionary stance towards close. Firmness early in the day also helped by positive expectations from upcoming IIP release especially with recent data showing eight core output data, a leading indicator for IIP, had recorded the biggest gain in in six months," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Sectors and Stocks

Banking sector gained after RBI reversed its order forcing lenders to surrender all their extra cash and place it under the cash reserve ratio.

Banking index in both headline indices settled the day 1% higher. All except 2 (Kotak Mahindra Bank and HDFC Bank) banking stocks ended in green on BSE Sensex led by gains in ICICI Bank SBI, Bank of Baroda and PNB. SBI (2.37%) was the top gainer on BSE Sensex.

Nifty PSU Bank index rose for a second straight session ending almost 2.48% higher. The index rose almost 4% intra-day. IDBI Bank, Oriental Bank, Allahabad Bank, Syndicate Bank and Bank of India were up between 2% and 5%.

The Nifty IT index pared gains after gaining 1.2% to end the day 0.58% higher. The gains were led by Tata Elxsi and MindTree while BSE IT ended 0.37% higher.

ONGC, Tata Motors, Asian Paints, RIL and NTPC were other gainers on BSE Sensex while Coal India, HDFC and Cipla were the losers.

Auto sector was trading in red after disappointing auto sales numbers post demonetisation move by the Modi government. Bajaj Auto was the biggest laggard on BSE Sensex, down 2.05%. M&M and Hero Moto were also down over 1%.

Steel Authority of India (SAIL) gained 4% at intra-day, also its 52-week high on the BSE, even after it reported a net loss of Rs 731 crore in September 2016 quarter (Q2FY17). The stock ended 3.37% higher.

The country’s largest state-owned steel major had posted a loss of Rs 1,109 crore in the same quarter last fiscal.

Global Markets

Asian markets edged down in today’s session but were on track for weekly gains. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3%, and was poised for a weekly gain of 1.9%.

Japan's Nikkei stock index ended 1.2% up at its highest closing level since December 2015, 3.1% ahead for the week in which the dollar has so far gained 0.8% against the yen.
 
The Nikkei earlier topped the 19,000-level for the first time in a year, as investors saw both the weak yen and prospects of U.S. President-elect Donald Trump adopting reflationary policies benefiting Japan's major exporters.

European shares rose to their highest in eleven months on Thursday as the European Central Bank's unexpected decision to cut its monthly asset purchases helped banks extend their rally.

The ECB move pushed long dated euro zone bond yields broadly higher, which in turn further boosted banking stocks with Europe's STOXX 600 Bank index rising 2.3%, on track for their best week in five years.

The ECB said it would cut its asset purchases to 60 billion euros per month from next April from the 80 billion euros, but promised protracted stimulus to aid a still fragile recovery.

(with agency inputs)