Sensex scores 180 on short covering in banks; ONGC up 4%

Moneycontrol Bureau

Equity benchmarks gained strength in late trade with the BSE Sensex gaining 180 points to close at 20128.41 on short covering in banks, capital goods and oil & gas stocks.

The 50-share NSE Nifty rose 64.75 points or 1.08 percent to finish at 6038.05.

Banks led the major support with the BSE Bankex gaining more than 2 percent after falling 7 percent in previous two sessions on RBI measures to curb rupee depreciation. HDFC Bank, the country’s second largest private sector lender, gained more than 3 percent while its rivals State Bank of India and ICICI Bank gained 0.5-1 percent.

Axis Bank was one of the star performers today, rising nearly 4 percent after it reported 22 percent growth year-on-year in first quarter (April-June) net profit at Rs 1409 crore, aided by higher net interest income (NII).

Meanwhile, Kotak Mahindra Bank and IDBI Bank recouped losses in late trade after initial knee jerk reaction to first quarter results. Former closed flat while later gained 1.2 percent. Both banks’ asset quality performance was weak.

All sectoral indices closed in green; the BSE Realty Index jumped 2.5 percent while Capital Goods gained 1.5 percent followed by Oil & Gas with 1.4 percent gains.

Shares of state-owned ONGC topped the buying list, soaring 4.4 percent after CLSA has upgraded the stock to a buy with a target price of Rs 360. “Subsidy burden for ONGC and Oil India may continue to be determined under the FY12-13 formula of USD 56 per barrel, despite assumption of a decline in Brent crude price to USD 102 in FY14,” CLSA report said.

Ahead of earnings today evening, Tata Consultancy Services, the country’s largest software services exporter, lost 0.8 percent after hitting a record high of Rs 1695 on the BSE.

Lupin shares gained 1.9 percent and also touched a life-time high of Rs 904.95 after the pharma company entered into a strategic partnership with Merck to co-market the Pneumococcal vaccine.

HDFC (up 0.7 percent), Reliance Industries (up 0.2 percent) and Bajaj Auto (down 0.53 percent) will announce their first quarter earnings on Friday.

Among midcaps, Info Edge shares spiked 10 percent after stellar performance in June quarter. Its net profit grew 4.66 times quarter-on-quarter to Rs 29.4 percent. CFO Ambarish Raghuvanshi says that the company may look at selling Jeevansathi.com if growth remains weak.

Saken Communications, Essar Ports, Bajaj Finserv and DB Corp gained 1-4.5 percent after good earnings.

UCO Bank surged 15 percent ahead of earnings that will be announced tomorrow.