Sensex regains 61,000-mark, Nifty gains 90 points; banks & financial rally

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Domestic benchmark equity indices opened the week on a flat note tracking Asian peers that fell as traders weighed inflation risks, a Covid-19 outbreak in China and earnings prospects for major technology firms. In opening trades Sensex jumped 247 points or 0.41% to 61,068 while the Nifty 50 was quoting at 18,205 higher by 90 points or 0.50%.

“After the 1.2% cut in Nifty last week, the market will try to stage a comeback on the back of the excellent numbers from ICICI Bank and reasonably good numbers from Reliance. A distinct trend in the market for many sessions now has been the outperformance of Bank Nifty which was up 2.5% last week when Nifty was down 1.2%. This outperformance is justified by the bank results so far and the trend may continue since there is valuation comfort in the banking segment in an otherwise overvalued market. So, even if the market turns weak, banking may show resilience,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The threat to the bulls is likely to come from the FIIs who have turned into sustained sellers. The Q2 results, so far, look impressive particularly in energy, metals, mining, IT and banking. The resurgence of Covid cases in the Eastern parts, particularly West Bengal, has to be watched, Vijayakumar added.

Top gainers & losers

Sectoral strand

Most sectoral indices were trading in the red on the NSE. Nifty Bank advanced 0.92% to trade at fresh record highs of 40,696 after ICICI Bank delivered a strong Q2.

On the downside, the Nifty Realty index tanked the most and was down about 1.85%, followed by Nifty FMCG and Nifty Auto indices losing 1.32% and 1.03% respectively. Nifty IT, Nifty Metal and Nifty Pharma indices slipped anywhere between 0.50-1%.

Broader markets

Unlike benchmark indices, the broader markets were trading with losses. The BSE MidCap index declined 243 points or 0.95% to 25,323. Similarly, the BSE SmallCap index was trading at 28,096 slipping 240 points or 0.85%.

The market breadth was negative as 1,549 stocks declined while 981 advanced and 144 remained unchanged.

Earnings today

Tech Mahindra, HDFC Asset Management Company, Aditya Birla Sun Life AMC, ANG Lifesciences India, Aurionpro Solutions, Ceat, Coforge, Colgate-Palmolive (India), CSB Bank, Dwarikesh Sugar Industries, Gujarat Mineral Development Corporation, Goodluck India, Home First Finance Company India, ICRA, Indus Towers, Jagran Prakashan, Kansai Nerolac Paints, Karda Constructions, LKP Securities, Maharashtra Scooters, Mangalam Organics, Newgen Software Technologies, Orient Cement, Prakash Industries, Quick Heal Technologies, Ramco Cements, Shriram Asset Management, SRF, Suven Life Sciences, and Welcure Drugs & Pharmaceuticals will be reporting their September quarter results today.

Global markets

Overseas, Asian stocks are trading mixed on Monday as investors look ahead to the release of quarterly earnings by HSBC. Meanwhile, the Covid-19 situation in China could weigh on investor sentiment after an official warned that the outbreak could spread further, as per reports.

In US, the Dow Jones Industrial Average closed at a record high Friday on optimism surrounding third-quarter earnings, even as shares of technology companies fell under pressure. The U.S. equity market on Friday faced pressure from selling in large-capitalization technology stocks, which weighed on the tech-heavy Nasdaq and the broad-market S&P 500.

Stocks came under pressure after Federal Reserve Chair Jerome Powell said the U.S. central bank was “on track” to begin reducing its purchases of assets.

In economic reports, IHS Markit’s survey of senior business executives in service-oriented companies rebounded to a three-month high of 58.2 from 54.9 in September. A similar survey of manufacturers slipped to 59.2 from 60.7. Any reading over 50 signals improving conditions.