D-Street Buzz: Banks, financials keep Sensex, Nifty aloft

After witnessing a fall on over 100 points, equity barometer Sensex rebounded smartly by over 200 points, supported by gains in shares of bank and financial heavyweights.

Around 1020 hours IST, the BSE Sensex was 205 points, or 0.54 percent, up at 37,878, while the NSE Nifty was 53 points, or 0.48 percent, up at 11,228. BSE Midcap and Smallcap were still in the red around that time.

Yes Bank, HDFC Bank, Kotak Mahindra Bank, ICICI Bank and State Bank of India were among the top gainers in the Sensex index.

On the flip side, Sun Pharma, Hero MotoCorp, Mahindra & Mahindra, ONGC and Tata Consultancy Services were among the top losers.

In the 30-stock Sensex pack, 18 were in the green.

Bank, finance and FMCG indices climbed up to 1 percent on BSE, while oil & gas and healthcare declined almost 1 percent.

Benchmark index Nifty closed negative in the last five successive sessions. However, it is still trading above key 20 and 50-day moving averages, indicating the current fall could be corrective in nature.

Also, the recent moving average bullish crossover of 20-DMA and 50-DMA is supportive of positive momentum in the mid-term.

"The decline in the benchmarks has made participants cautious again as many of them were hoping the gains after the cut in the corporate tax rate to extend further. It’s certainly not an encouraging sign before the beginning of the earnings season. We may see further decline ahead and Nifty could find support around 11,050-10,800 levels. In case of a rebound, 11,250-11,400 zone would act as a hurdle," said Ajit Mishra, Vice President - Research, Religare Broking.

"This week is holiday-shortened one and it would kick-start the earnings season with IT majors, TCS and Infosys, reporting their numbers on October 10 and October 11, respectively.  Besides, participants will be closely eyeing the IIP data which is scheduled on October 11. On the global front, the trade negotiations between the US and China are likely to resume from October 10," he added.