Markets get global boost, Sensex rises 286pts

The markets ended on an upbeat note following positive news of Greece bail out by European Union and gains in banking shares after Axis Bank reported better than expected results.

The Nifty opened in the green at 5,577 and moved steadily higher, underpinned by rally in front-line banking stocks - Axis Bank, ICICI Bank and Punjab National Bank. The index touched a high of 5,642 in the afternoon session and ended near day’s high at 5,634, up 92 points. The Sensex rallied 286 points, at 18,722.

Going forward, markets will take cues from Reliance Industries earnings on Monday, and the Reserve Bank of India's tightening policy on Tuesday. Economists are expecting that the RBI will pause the rate hike cycle when it meets on Tuesday, after raising rates by another 25 bps. The government has raised interest rates ten times in the last one year to contain high levels of Inflation.

On the global front, the second bail out of Greece by European Union at $1.57 billion pepped up risk appetitive for equities and indices across Asia notched over 1% gains. Japan’s Nikkei Stock Average gained 1.2%, Hong Kong’s Hang Seng Index jumped 2.1% and China’s Shanghai Composite surged 0.2%.

Back in India, investors cashed into the banking shares after Axis Bank reported a growth of 27%. Net profit advanced to Rs 942 crore as compared to Rs 742 crore in the same quarter last fiscal year. Net interest Income was reported at Rs 1,724 crore. The stock rallied 5% after the results to end at Rs 1,296.

Better than expected results from Axis bank prompted buying interest in other banking stocks such as Union Bank, up 5%, Yes Bank, up 3.7% and ICICI Bank, up 2.6%, pulling the BSE Banking index up by 2.2%.

Among individual stocks, Bharti Airtel ended at Rs 411, up 4%, after touching a 52 week high of Rs 412 after reports of hike in call tariffs by 20% to 1.2 paise from 1 paise per second in some circles.

Reliance Industries surged 1.5% to Rs 873 on expectations of a cabinet nod for the RIL-BP (British Petroleum) deal worth $7.2 billion. Meanwhile, the oil & gas conglomerate is also expected to report 15% growth in net profit to Rs 5,600 crore, led by 29% growth in net sales for the June quarter.

Rate sensitive auto shares were also among the top gainers, the index advanced 1.7%. Mahindra & Mahindra was up 3%, Ashok Leyland gained 2.6%, and Tata Motors added 2.2%.

Top gainers on the Sensex were Reliance Communication, up 3.4%, Infosys gained 2.1% and Bajaj Auto rallied 2%. Only three components on the Sensex ended in the red; DLF was down 0.4%, Hindalco Industries slipped 0.3% and Jindal Steel declined 0.1%.

From the broader markets, the midcap index surged 1.3% and the smallcap index added 0.2%.

Market breadth was positive, 1715 stocks advanced, for 1188 stocks which declined.