Sensex soars 241 pts to hit 2-mth high; banks fuel rally

Investors widened their bets on optimism that upcoming general budget -- to be unveiled next month – would contain incentives for corporates, which will help boost the economy

Extending Tuesday’s rally, benchmark Sensex today surged nearly 241 points to close at a two-month high of 27,140 and Nifty reclaimed the 8,300-level on widespread buying triggered by a positive start of the earnings season and firm Asian cues.

Investors cheered better-than expected Q3 numbers in IndusInd Bank along with bullish Asian stocks ahead of US President-elect Donald Trump's news conference later in the day that will give his policy insight.

Besides, investors widened their bets on optimism that upcoming general budget -- to be unveiled next month – would contain incentives for corporates, which will help boost the economy.

Anand James, chief market strategist, Geojit BNP Paribas Financial Services Ltd, said, "Indian stocks opened on a firm note as banking stocks were propped up by IndusInd Bank as well as South Indian Bank's results which lent positivity at the start of Q3 season...metal sector got a shot in the arm following reports of reduction in Chinese production."

IT stocks remained on the back foot ahead of US President-elect Donald Trump's first press conference scheduled in the day, in the backdrop of reintroduction of bill on visa restrictions, James added.

The 30-share Sensex resumed higher at 26,978.44 and quickly breached the 27,000-mark to hit a high of 27,174.87 before winding up at 27,140.41, scoring a notable rise of 240.85, or 0.90 per cent. The Sensex had closed at 27,517.68 on November 10 last year.

The NSE Nifty also climbed 92.05 points, or 1.11 per cent, to end at 8,380.65 after trading between 8,389 and 8,322.25. (the key index had closed at 8,525.75 on November 10, 2016).

On Tuesday, IndusInd Bank reported a healthy growth in its net profit by 29 per cent and the Net Interest Income increased by 34 per cent despite cash crunch created by demonetisation, as investors negated apprehension in banking sector, lapping it up by 2.40 per cent.

The broader markets outperformed the headline indices with gains covering in metal, banks, finance, capital goods, utilities and power sectors, as IT sectors incurred profit-booking on caution as investors awaiting the key quarterly results of corporates TCS and Infosys.

Meanwhile, Midcap and Smallcap shares also traded with substantial gains.

Overseas, Asian stocks ruled higher ahead of the first address of US President-elect Trump. Markets are hoping for some concrete views from him on policy and a checklist of his priorities as he meets the press today.

South Korea and Hong Kong gained 1.47 per cent and 0.84 per cent, respectively while Japan's Nikkei 225 Average settled 0.33 per cent higher. China ended lower by 0.79 per cent.

European shares trading mixed with London FTSE gained 0.15 per cent, while CAC and Dax down by 0.60 per cent to 0.41 per cent.

Meanwhile, US equities closed higher yesterday, as the Nasdaq composite notched a fresh record high.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 21.20 crore yesterday, as per provisional data released by the stock exchanges.

Domestic institutional investors (DIIs) bought shares worth a net Rs 253.36 crore yesterday, as per provisional data.

In broader markets, the BSE Mid-Cap index provisionally rose 1.37 per cent. The BSE Small-Cap index provisionally advanced 0.98 per cent. Both these indices outperformed the Sensex.

Of the 30-share Sensex pack, 23 scrips ended higher while only 7 closed lower.

Major gainers were Coal India 5.41 per cent, Tata Steel 3.99 per cent, Lupin 2.20 per cent, L&T 1.91 per cent, ICICI Bank 1.79 per cent, Power Grid 1.69 per cent, HDFC Bank 1.67 per cent, SBI 1.63 per cent, Sun Pharma 1.47 per cent, Axis Bank 1.39 per cent and Maruti 1.35 per cent.

However, Bajaj Auto fell by 0.85 per cent followed by ITC 0.56 per cent, reliance 0.28 per cent, ONGC 0.18 per cent and Infy 0.16 per cent.

Among BSE sectoral and industry indices, metal rose by 4.42 per cent followed by bankex 2.40 per cent, finance 2 per cent, capital goods 1.39 per cent, utilities 1.08 per cent, power 1 per cent and industrials 0.97 per cent, while IT fell by 0.02 per cent.

The market breadth remained positive as 1,738 shares ended higher, 1,071 closed lower while 161 ruled steady.

The total turnover on BSE amounted to Rs 3,637.32 crore, higher than turnover of Rs 2,820.43 crore registered during the previous trading session.