Easing inflation spurring rate cut hopes, global rally, IT stocks’ rise and technical factors, among others, helped the market post strong gains on Tuesday. The Nifty ended just short of 10,900-mark. A rally in index heavyweight such as Reliance Industries aided sentiment too.
With this, the market managed to snap its three-day losing streak.
All sectoral indices ended in the green, with maximum gains visible among IT and energy names, while metals and banks, too, closed with sharp gains.
Along with Reliance Industries, investors placed positive bets on HDFC twins, Infosys and TCS, all of which contributed 60 percent to Nifty gains.
Experts largely expect the rally amid intermittent volatility is likely to continue ahead of interim Budget on February 1 and the Nifty could surpass 11,000 levels in coming sessions.
“The easing of crude oil prices, persistent weakness in inflationary trends and the easing of bond yields has resulted in a marked improvement in macroeconomic conditions – an important pre-requisite for a rally in Indian equity markets,” Hemang Jani, Head – Advisory, Sharekhan, a subsidiary of BNP Paribas told Moneycontrol.
He said, earnings growth is set to revive meaningfully in FY19-20, primarily driven by peaking out of NPA-related provisioning requirements for banks. The changing fortunes of three corporate lending banks in Sensex: ICICI Bank, Axis Bank and State Bank of India, together would generate sufficient push for earnings to grow at close to around 20 percent in FY20.
At the close of market hours, the Sensex was up 464.77 points or 1.30% at 36318.33, while the Nifty was higher by 149.20 points or 1.39% at 10886.80. The market breadth was positive as 1548 shares advanced, against a decline of 996 shares, while 166 shares were unchanged.
Yes Bank, Infosys, and Wipro were the top gainers, while Maruti Suzuki, Power Grid, and ICICI Bank lost the most.
Stocks in the News
Eveready ended the session with gains of over 5 percent after taking a sharp hit intraday.
Yes Bank continued its upward move and managed to end 3 percent higher. The stock contributed 30 points to Bank Nifty’s gain.
Shares of United Spirits gained 1 percent after company entered into an agreement for stake sale in subsidiary company.
Shares of ICICI Securities slipped 5 percent after a broking house cut target price on the back of poor set of numbers declared by the company for the quarter ended December 2018 (Q3FY19).
Reliance Industries shares gained more than 3 percent after CLSA sees humongous $ 550 billion retail opportunity as the company stated last year that it wants to be the largest consumer company.
Sadbhav Engineering shares rallied 1 percent after global research house Macquarie expects 71 percent potential upside in the stock on likely divestment in road projects.
Trident shares gained 4 percent after promoter increased stake in the company to over 70 percent in the quarter ended December 2018.
European stocks were higher over Brexit-based developments. Stoxx 600 was up around 0.2 percent.
Asia Pacific markets mostly traded higher. South Korea’s Kospi added 32.66 points, or 1.58 percent, to 2,097.18 while the Kosdaq gained 7.30 points, or 1.07 percent, to 690.39.