Banks & metals lift Sensex 241 pts, Midcap 1%; Hindalco soars 6%
Equity benchmarks extended gains for second consecutive session Wednesday, with the Sensex closing at two-month high after stable earnings from banks and China's decision on steel plants.
Equity benchmarks extended gains for second consecutive session Wednesday, with the Sensex closing at two-month high after stable earnings from banks (despite demonetisation) and China's decision to cut steel production. Globally investors will closely watch US President-elect Donald Trump's news conference later in the day for any clues to his policies on tax, fiscal spending, international trade and currencies.
The 30-share BSE Sensex closed above 27000 level for the first time since November 10, 2016, up 240.85 points or 0.90 percent at 27140.41. The 50-share NSE Nifty moved closer to 8400 level, up 92.05 points or 1.11 percent at 8380.65.
The worst is getting over, believes Vibhav Kapoor of IL&FS who expects Nifty to touch 9000 levels in six months from now.
He says a 17-18 percent increase in Nifty can be seen in the third quarter of current calendar year as banks and metal stocks will perform better.
State elections are round the corner and Kapoor says that the polls are the most important cue in 2017 for the markets. As for the emerging markets, he says US will play a very important role.
The broader markets also traded in line with benchmarks. The BSE Midcap index was up 1.4 percent and Smallcap gained 1 percent on positive breadth. About 1714 shares advanced against 1089 declining shares on the exchange.
Stable loan growth & earnings of IndusInd Bank and South Indian Bank despite currency demonetisation lifted Bank Nifty over 2 percent. Bank of Baroda, PNB, Kotak Mahindra Bank, ICICI Bank, HDFC Bank, SBI and Axis Bank gained 1-4 percent.
IndusInd Bank rallied more than 6 percent as brokerage houses retained a buy call on the stock after stable earnings and asset quality in third quarter of FY17. With maintaining buy rating on the stock, CLSA raised target price to Rs 1,450 (from Rs 1,400 earlier) following increase in earnings estimates by 2-3 percent for FY17-19.
Private sector lender South Indian Bank was up 2 percent after improvement in asset quality in Q3.
Metals stocks remained strong today, with the Nifty Metal index rising more than 4 percent after China said it would be closing all of its medium frequency furnaces by June 2017. These furnaces contribute close to 9 percent to China's total steel capacity. Jindal Steel, NALCO, Hindalco, Coal India, JSW Steel and Tata Steel surged 4-9 percent.
Lupin shares gained more than 2 percent on account of approval from US Food and Drug Administration for Desoximetasone cream that is used for relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses.
Maruti Suzuki was up over a percent after a media report indicated that its Gujarat plant will start production from February.
Shares of L&T, HDFC, Asian Paints, Sun Pharma and HUL rose over a percent while ITC, Reliance Industries, Bajaj Auto and ONGC were under pressure.
European stocks were moderately higher as investors waited for the first address of President-elect Donald Trump. Asia also ended higher.