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Bank stocks steer Nifty 50, Sensex to green territory, Kotak leads rally

The rupee, too, strengthened slightly, settling at 86.57 per dollar, compared with 86.61 on Friday

Market, BSE, NSE, NIfty, Stock Market, investment

(Photo: Shutterstock)

Sundar Sethuraman Mumbai

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The equity benchmarks ended Monday’s session in positive territory, buoyed by gains in banking stocks, particularly after Kotak Mahindra Bank reported strong earnings. The Sensex closed at 77,073, up 454 points or 0.6 per cent, while the Nifty 50 index rose 142 points, also up 0.6 per cent, finishing the day at 23,345.
 
The rupee, too, strengthened slightly, settling at 86.57 per dollar, compared with 86.61 on Friday. The local currency reached an intraday high of 86.46 before a slight dip in the latter part of the session, driven by foreign portfolio investors’ (FPIs) dollar purchases. The dollar index, which measures the greenback against a basket of six major currencies, decreased by 0.2 per cent to 109.1.
 
 
Trading volumes were subdued in the currency market due to the closure of US markets, with traders adopting a cautious stance ahead of Donald Trump’s second inauguration as US president. The implied volatility of the dollar-rupee pair, which reflects expectations for future fluctuations, surged to a multi-month high across various tenors, reflecting uncertainty surrounding Trump’s policies.
 
The 1-month implied volatility peaked at 4.54 per cent on Monday, its highest level since August 2023. Dealers expect the rupee to trade in the range of 86.20 to 86.80 per dollar on Tuesday.
 
The broader equity market also posted gains, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising by 0.9 per cent and 1.09 per cent, respectively. Market breadth was strong, with 2,467 stocks advancing and 1,603 declining. 
chart
 
The total market capitalisation of BSE-listed firms rose by approximately Rs 2.9 trillion to Rs 432 trillion.
 
Foreign portfolio investors sold shares worth Rs 4,337 crore, while domestic institutional investors matched these outflows with similar-sized purchases.
 
Kotak Mahindra Bank was the standout performer among Sensex components, with its shares rising by 9.2 per cent following a 10 per cent increase in its consolidated net profit for the quarter ended December. Gains in the bank’s stock boosted the Nifty Private Bank index by 2.4 per cent.  
 
“The Nifty 50 was buoyed by strong global cues ahead of Trump’s swearing-in and a sharp rally in Kotak Mahindra Bank and Wipro (stocks) following their strong Q3 results. We expect the market to trade within a broad range, with stock- and sector-specific action continuing as the Q3 result season picks up,” said Siddhartha Khemka, head-research, wealth management, Motilal Oswal Financial Services.    
 
Apart from the ongoing earnings season, shifts in US policy and the Union Budget, due next month, will likely influence the market’s direction in the coming weeks.
 
“Uncertainties surrounding Trump’s policies persist, with investors awaiting further clarity. Oil prices remaining high is another key concern,” said Vinod Nair, head of research at Geojit Financial Services.
 
(With inputs from Anjali Kumari)
 
Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd
 

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First Published: Jan 20 2025 | 8:50 PM IST

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