Markets to end higher, Banking shares surge

Markets surged higher on bargain hunting and strong IIP data. Rally in banking and capital goods sectors has pulled the Sensex to 19,395-up 153 points. The S&P CNX Nifty has gained 58 points to 5842.

Industrial output rose to 10.8% for the month of October on back of healthy performance in sectors such as automobile, electronic goods and power. The IIP data gave fillip to capital goods shares. Suzlon has surged 2%, BGR Energy has risen 4.5% and Gammons India has extended 2.5%. Shailesh Kadam, AVP, Institutional Derivatives from PINC likes Crompton Greaves from the midcap space and BHEL from the large cap space. "The rollovers last expiry were also good in capital goods sector," Kadam added.

 

Analysts are banking on India's growth which will help markets scale new highs. Subhash C Agarwal, CMD, SMC Global Securities said, "continue to be bullish on the Indian growth story. The markets should consolidate in the next four five days. I expect the markets to climb back to the 20,000-level by year-end."

Investor optimism was curtailed in Asia on China rate hike fears. China's exports and imports soared for the month of Novemeber which is expected to ratched up pressure on the government to raise rates to tame inflation. China's Shanghai Composite rose 1.1%, Hong Kong's Hang Seng Index shed 0.04%, Japan's Nikkei Stock Average was off 0.7%, Singapore's Straits Times Index fell 0.8%, Taiwan's weighted index slid 0.4%, and South Korea's Seoul Composite slid 0.2%. Investors were cautious in Europe as well over China cool down as markets were trading only marginally higher.

Banking stocks which were badly beaten down yesterday took an U-turn on bottom-fishing. Axis Bank has risen 4.3%, ICICI Bank has surged 3.9% and Kotak Mahindra Bank has risen 3.2%.

Cement stocks were also trading higher on back of firm IIP data, Ambuja Cements was the top gainer on Nifty, up 5.7%, ACC has extended 4.5% and JP Associates has advanced 3.8%.

Other prominent gainers on Nifty are IDFC (up 3.5%), Cipla (up 3.2%) and NTP (up 3%). Among the losers, Bharti Airtel has fallen 3.7%, Tata Motors was down 3.4% and Bajaj Auto was down 3%.

The Nifty midcap index was also trading firm, up 1%.