Led by banking stocks, markets rallied on Monday on strong earnings numbers, easing of Middle East tension and fall in crude prices. The benchmark BSE Sensex jumped by 941.12 points or 1.28 per cent to 74,671.28 and the NSE Nifty Index gained 223.45 points or 1 per cent to close at 22,643.40 on strong buying support.
The rally was led by banking stocks with ICICI Bank gaining 4.67 per cent and SBI 3.09 per cent. The BSE Bankex rose 2.7 per cent.
Positive global cues boosted the sentiment as major European markets and the US stock futures rose with investors shifting their focus to the Federal Reserve’s policy decision on Wednesday and US jobs data on Friday.
The rupee declined by 7 paise to close at 83.45 against the US dollar on Monday as investors remained cautious ahead of the US Federal Reserve’s monetary policy decision.
Strong corporate earnings
Markets in India witnessed phenomenal buying support, led by banking stocks. Closing at 74,671.28 points, Sensex is quickly moving towards the crucial 75,000 mark as investors cheered strong corporate earnings from select frontline banking and cement companies.
While the market seems to have factored in the possibility of no rate cut in the near future, the drop in the US GDP data for the first quarter has raised hopes that the US Fed may go for at least two rate cuts this year.
Domestic markets witnessed phenomenal buying support as Sensex quickly moved towards the crucial 75,000 mark after investors cheered strong corporate earnings from select frontline banking and cement companies, indicating their smooth sailing despite the global vagaries.
“Indian benchmark indexes rebounded, aided by an upbeat in US tech quarter earnings and a drop in US 10-year yield. Domestically, the Bank Nifty outperformed, driven by its strong performance in the fourth quarter,” said Vinod Nair, Head of Research, Geojit Financial Services. “The easing Middle East tension, coupled with stable earnings, is expected to maintain positive market sentiment. Moving forward, the Fed policy and US non-farm payroll data will dictate the overall market dynamics,” he said.
Ajit Mishra, SVP, Research, Religare Broking Ltd, said favourable global cues combined with noticeable traction in banking majors aided a positive start, which further strengthened as the day progressed. However, a mixed trend on the sectoral front kept the momentum in check wherein realty, IT and auto traded subdued. The broader indices maintained their positive tone and ended with modest gains.
The fresh buoyancy in the banking index has paved the way for a new high in the Nifty index while others may continue to offer support on a rotational basis.
According to Prashanth Tapse, Senior VP (Research), Mehta Equities, optimism prevailed from the start of the trading session as cooling of US bond yields and letdown in middle-east conflict coupled with a drop in crude oil prices generated a lot of enthusiasm amongst the investors.
BSE shares fall 13.67%
Meanwhile, shares of BSE Ltd plunged by 13.67 per cent to Rs 2,771.25 on the NSE on Monday following the Sebi’s directive to the exchange to cough up option turnover fee as per the ‘notional value’. BSE stock tumbled as much as 18.6 per cent to a low of Rs 2,612 in intra-day trades on Monday on the NSE after the market regulator Sebi directed the stock exchange to pay regulatory fees on option turnover, including arrears and interest cost within a month.
Total regulatory fees along with 15 per cent interest, is to be remitted to Sebi based on annual turnover considering “notional value” in the case of option contract. The differential Sebi regulatory fees for the year, if liable, could be around Rs 96.30 crore plus GST, BSE said in an exchange filing. BSE shares are listed only on the NSE.