Sensex, Nifty hit new peaks as banks rally after SBI's result

The markets on Monday closed on a record high, with the Nifty closing for the first time above the 8,400 level due to the narrower trade deficit in October as compared to the previous month and an increased hope of a rate cut by the Reserve Bank of India.

The BSE Sensex rose as much as 0.57 per cent to an all-time high of 28,205.71. The index ended up 0.47 per cent. The Nifty closed 0.49 per cent up after earlier hitting a record high of 8,438.1.

The markets started on a flat note but after the declaration of trade deficit data at $13.35 billion, which was much lower than expected, the market started to gain, ending at another all-time high. As per the government's trade deficit data the country's oil import bill stood at $12.36 billion, down by 19.2 per cent due to the low crude oil prices.

Among the sectoral bets S&P BSE Power was the biggest gainer, with it gaining a 1.54 per cent high from the previous day's closing. The S&P BSE auto with an overall gain of 1.43 cent was the second highest gainer on hopes of better demand.

"Due to the expectation of rate cut sectors related to the infrastructure like power are expected to gain. Valuations too are attractive for power companies," said Deven Choksey, managing director, KR Choksey.

The top Nifty gainers were SBI, Bank of Baroda and Tata Motors. JSPL, DLF and UltraTech Cement were the top losers for the day. SBI was the top Sensex gainer up 5.4 per cent after the bank posted 30.5 per cent rise in net profit at Rs 3,100 crore for the second quarter ended September 2014, due to robust growth in income from interest, fees and control over costs.

Tata Motors was up four per cent. The company posted lower than expected earnings for the second quarter due to weak domestic sales. However, the revenues from its subsidiary Jaguar-Land Rover were in line with market estimates, contributing to the gain. Hero MotoCorp was another notable gainer from this space, with gains of 2.1 per cent.

Foreign investors were net buyers with net buy of Rs 656.37 crore. On the other hand, the domestic investors were net sellers with net sale to the tune of Rs 247.86 crore. "All in all, if you see we started the day with a low due to recessionary signals at Japan. However, we gained considerably due to trade deficit data," P Phani Sekhar, fund manager, Angel Broking.

Balkrishna Industries slumped 7.1 per cent, adding to Friday's 16.6 per cent decline after price cuts weighed on July-September earnings, analysts said.