Banks lift Sensex 438 pts; Nifty above 7700 ahead of F&O expiry

Moneycontrol Bureau

Bulls roared on Dalal Street Wednesday as equity benchmarks surged nearly 2 percent driven by banks after Vijay Mallya submitted repayment plan to Supreme Court. The rally was also supported by positive global cues after Fed Chair Janet Yellen comments.

The 30-share BSE Sensex spiked 438.12 points or 1.76 percent to 25338.58. The 50-share NSE Nifty climbed 138.20 points or 1.82 percent to 7735.20 ahead of expiry of March derivative contracts (on Thursday).

The broader markets also participated in rally with the BSE Midcap and Smallcap indices rising over 1.8 percent each as about 1873 shares advanced against 750 declining shares on Bombay Stock Exchange.

Experts expect the rally to continue on support from FIIs money after Yellen's speech.

The markets see Janet Yellen's speech yesterday as being dovish, says Ian Hui of JP Morgan Asset Management. Fed statements suggest they have a cautious approach towards rate cuts and so it is unlikey to see a hike in April. But a hike in June is possible, he feels.

Going forward, too, Hui expects the rally to continue, more so because commodities have stabilised and fears of a China slowdown have diminished.

Globally, European markets were higher with CAC, DAX and FTSE rising nearly 2 percent after dovish cue from Yellen. Majority of Asian markets also ended higher with Shanghai and Hang Seng climbing over 2 percent.

On home turf, Bank Nifty surged 3 percent and Nifty PSU Bank gained 4 percent, especially after Vijay Mallya, chairman of the grounded Kingfisher Airlines, submitted repayment plan to Supreme Court. He is ready to pay Rs 4,000 crore by September 2016 to banks.

State Bank of India, which has biggest exposure of Rs 1,400 crore to Kingfisher, rallied 4 percent. Punjab National Bank and Bank of Baroda gained over 4 percent. ICICI Bank was the second biggest gainer on Sensex, up 6.3 percent followed by Axis Bank with 3 percent upside.

Lupin rose more than 5 percent after Credit Suisse believes that USFDA observations will have no impact on company's growth as there is no pending ANDA from Mandideep plant. Sun Pharma was up 2 percent after acquisition of 14 Novartis brands for Rs 1,900 crore in Japan.

Metals stocks were shining today with the Nifty Metal index rising 3.6 percent after the government extended safeguard duty on steel imports. Hindalco and Vedanta gained more than 4 percent. Tata Steel topped buying list on Sensex, up 6.75 percent as the company is exploring all options for portfolio restructuring including potential divestment of Tata Steel UK, in whole or in parts.

Nitco and Murudeshwar Ceramics gained nearly 10 percent. Kajaria Ceramics and HSIL rose 1-2 percent after the government has imposed USD 1.37 per square metre anti-dumping duty on all vitrified tiles from China for six months.

Adani Ports surged over 3 percent after the company raised Rs 500 crore through issue of debentures. ONGC advanced 2.4 percent after the company found hydrocarbon deposit in Mizoram. Shares of Gail India gained 3.5 percent after it started drilling first exploratory well as operator in its NELP-IX block CB-ONN-2010-11 in Cambay basin at Anand district, Gujarat.

Among others, Tata Motors, ITC, L&T, Bajaj Auto and Hero Motocorp were up 2-4 percent while HDFC lost another 1 percent today.Healthcare Global Enterprises saw a weak debut today, falling 21.55 percent to close at Rs 171 against issue price of Rs 218.