Sensex rallies 333 points, Nifty50 reclaims 7,700; HUL gains 4%
The benchmark indices opened the day on strong notes and then maintained the winning momentum through the day with the Sensex ending with a gain of 333 points.
Bank shares rose and bond markets surged on Monday after the government on Friday cut interest rates for term deposits offered to millions of small savers. Some analysts said the move will ensure better transmission of policy rate cuts and prompt RBI to lower rates in its April policy review.
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The country’s largest lender SBI rallied 3 per cent, while mortgage lender HDFC and ICICI Bank gained 2 per cent each, Axis Bank 1.75 per cent and HDFC Bank 1.50 per cent, giving the biggest push to the 30-pack Sensex, whose 24 constituents ended the day with gains.
Foreign institutional investors continued to bet big on domestic stocks, in addition to the Rs 11,000 crore they have pumped in so far in March.
In China, state margin lender China Securities Finance Corp said it would resume some short-term lending after suspending parts of its business 18 months ago and cut brokerages' borrowing costs. This helped several markets shrug off a retreat in oil prices on concerns over excess supply.
The US dollar edged higher after falling for three successive weeks.
The S&P BSE Sensex and the broader Nifty50 opened the day on strong notes and then maintained the winning momentum through the day with the Sensex ending with a gain of 333 points or 1.33 per cent.
The NSE's Nifty50 reclaimed its psychological mark of 7,700 and advanced as much as 100 points in intra-day trade.
“The index has been doing pretty well, holding steady all through the day without any serious bouts of selling. Whatever selling has been seen, it was as a result of profit taking by investors,” said Dr CK Narayan, Founder, Chart Advise.
Banking, cement and realty stocks led the gains. Among the sectoral indices, the BSE basic materials index gained 1.94 per cent, supported by Adhunik Industries and Saurashtra Cement.
Cement stocks gained on the back of rising prices of the construction material. Goldman Sachs said there would be a 9 per cent increase in demand led by increased government focus on infrastructure. KCP, Dalmia Bharat and Mangalam Cement rose 12.01 per cent, 8.61 per cent and 7.34 per cent each, respectively.
Realty stocks witnessed renewed buying. Prestige Estates and Sobha Developers gained the most in the BSE Realty index.
The BSE Bankex witnessed a spectacular rally ahead of the RBI policy review on April 5. State Bank of India, Punjab National Bank and Bank of Baroda were the major gainers on the index.
IDBI Bank witnessed hectic buying, following reports that the government was planning to sell its stake in the bank to two big institutional investors.
Jewellery stocks dazzled in trade as traders resumed work on Monday after ending an 18-day strike over the 1 per cent excise duty imposed on jewellery articles in the Union Budget.
Shares of Asian Paints lost 1.75 per cent after Kotak Institutional Equities said its channel checks suggested that the company has cut prices across its decorative portfolio by around 3 per cent.
Shares of IT firm MphasiS lost 7 per cent as reports indicated that Blackstone will be buying the company at a big discount. ITC gained xxx per cent after Credit Suisse maintained an overweight rating on the stock.
InterGlobe Aviation advanced 5.24 per cent after JP Morgan initiated coverage of the stock with an overweight rating and a price target of Rs 950.
Elsewhere in Asia, China’s Shanghai Composite Index closed 2.15 per cent higher at 3,018.80 and Hong Kong's Hang Seng index gained 0.06 per cent to 20,684.15. Japan's Nikkei ended 1.25 per cent lower at 16,724.81.
MARKET IN THE MORNING: The S&P BSE Sensex surged 333 points to reclaim its crucial psychological level of 25,000 on Monday, led by gains in ITC, HDFC, and ICICI Bank.
The Nifty50 breached its crucial mark of 7,700, supported by gains in consumer durable, realty, banks, auto, and oil & gas stocks.
The broader market rallied in line with the benchmarks, with the BSE midcap and smallcap indices gaining 1.40 and 1.36 per cent, respectively, for the day. A sharp rise in the Chinese market, gains seen on Dow Jones futures and positive trading in European markets, boosted the market sentiment.
The rupee continued its winning streak for the fourth session by rising 4 paise to 66.46 against the US dollar on Monday, despite mixed cues from Asian currency markets.
The domestic currency had closed 25 paise higher at 66.50 against the US dollar on Friday. The local unit had risen 88 paise, or 1.31 per cent, in the three sessions to Friday.
Markets @ 9:20
The 30-share index was trading at 25,068, up 115 points or 0.46 per cent. It touched a high of 25,083.62 and a low of 24,988.27 in morning trade.
The Nifty50 was trading at 7,640 up 36 points or 0.48 per cent. It touched a high of 7,641.05 and a low of 7,617.70 in the first 30 minutes of trade.
The S&P BSE Midcap Index was up 0.49 per cent and BSE S&P Smallcap Index was trading 0.58 per cent higher.
Axis Bank (up 1.7 per cent), Sun Pharma (up 1.6 per cent), HDFC (up 1.5 per cent), SBI (up 1.5 per cent), and ITC (up 1.4 per cent), were the major Sensex gainers.
Adani Ports (down 1.5 per cent), Lupin (down 1.5 per cent), Asian Paints (down 1.5 per cent) and Dr Reddy’s Laboratories (down 0.74 per cent) were the major Sensex losers.
Technical charts look promising
The Nifty50 managed to close above the 7,600 mark on Friday. Experts believe if the index finds initial momentum on Monday, it may possibly move higher.
“We can look forward to the next week with certain degree of optimism. This move has been building up pretty steadily. The market had rallied up to 7,600 earlier, taken its time, resisted going down, came back, did a few tests of the sellers there, absorbed all the selling which happened there and on Friday closed above it,” said CK Narayan, Founder, Chart Advise.
“Of course, we do need to see follow-through price action on Monday when we open and if the Nifty50 were to open above 7,600-7,615, then I think it would be off to the races and we can probably trade aggressively,” Narayan said.
The market mood in near term will depend on global market trends, investment by foreign portfolio investors (FPIs) and crude oil price movement, said Rohit Gadia, Founder and CEO at CapitalVia Global Reserch
"We expect RBI to cut interest rates by 25 basis points at its policy review on April 5, after data on Monday showed inflation easing more than expected in February,” he said.
Asian markets stay mixed
Most Asian markets were trading mixed. Japan’s markets were closed for the day on account of Spring Equinox Day. China's CSI300 rose 2.40 per cent to 3,230. Other Asian indices, including Hong Kong’s Hang Seng (down 0.27 per cent), South Korea’s Kospi (down 0.18 per cent) and Taiwan’s TWSE (down 0.46 per cent) were trading higher.
US market rose on Friday
Wall Street ended at higher on Friday, with the S&P500 index gaining 0.44 per cent, to 2,049.55, while the Dow Jones industrial average advancing 0.69 per cent to 17,602.30. It meanwhile kissed $42 a barrel mark in trade.
Brent crude settled 34 cents, or 0.8 per cent, lower at $41.20 a barrel on Friday. US crude, on the other hand, settled down 76 cents, or 1.9 per cent, at $39.44.
“Globally, we all know a large amount of money printing is going on. Interest rates are going to be too low and there was a huge risk-off trade earlier and everything that went to safe havens is now coming back. The risk appetite is coming back because oil has gone up,” said Parag Thakkar, Head-Institutional Sales, HDFC Securities.