Banks, L&T lift Sensex 485 pts; Nifty soars 3% in May series

Moneycontrol Bureau

Bulls have taken complete control over Dalal Street on Thursday, the expiry day for May Nifty derivative contracts. Value buying in infra (majorly L&T) and banks helped the Sensex (that rallied more than 500 points intraday) and Nifty end at fresh 2016 closing high.

The 30-share BSE Sensex surged 485.51 points or 1.88 percent to 26366.68 and the 50-share NSE Nifty rose 134.75 points or 1.70 percent to 8069.65 despite choppy trade in global peers.

According to analysts, the rally may be on hopes of good monsoon and likely further growth in economy.

Sudarshan Sukhani of s2analytics.com says he believes the market is giving clear message that it is going to scale much higher levels; therefore, it is important to keep positions intact.The immediate upside levels for Nifty are 8300-8400, Sukhani feels.

The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices rising 1 percent and 0.9 percent, respectively. However, the market breadth was not strong. About 1406 shares advanced against 1139 declining shares on Bombay Stock Exchange.

For May series, the Nifty as well as Sensex gained 3 percent each while the Nifty Midcap fell 0.4 percent. Bank Nifty has seen a 4 percent spike.

"Rollovers were broadly in line for Nifty and stocks but roll cost was substantially higher, this could be attributed to a longer June expiry (34 days) also due to the buoyant retail sentiment," S Hariharan of Emkay Global Financial Services says.

The month has seen FII positioning increase on the short side while retail has been adding to their longs, he adds.

Infrastructure major L&T was the biggest gainer today, rallying 14 percent as brokerages upgraded the stock after its quarterly earnings beat expectations. Jefferies has upgraded to buy from hold and raised target price to Rs 1,750 from Rs 1,250.

State-run oil & gas explorer ONGC rose 3 percent after better-than-expected profit (up over 3-fold QoQ) and revenue in Q4.

State Bank of India gained nearly 5 percent ahead of fourth quarter earnings that will be announced on Friday. A CNBC-TV18's consensus estimates indicated a 49 percent fall in profit and slippages in range of Rs 20,000-25,000 crore for the quarter.

Among others, Infosys, ICICI Bank, ITC, HDFC, Axis Bank, TCS, HUL and Maruti Suzuki gained 1-3 percent while Sun Pharma, Reliance Industries, NTPC and Lupin were losers.

On the global front, European markets were trading marginally higher with France's CAC and Germany's DAX rising 0.4 percent each (at 16 hours IST). Asian markets ended mixed. Brent crude oil hit USD 50 a barrel for the first time in nearly 7 months, up 0.7 percent.