Sensex rises for second day, banks rally on RBI debt loss relief

Indian equities after trading range-bound for a better part of Tuesday’s session finally ended higher, with banking shares leading the way after the RBI allowed lenders to spread provisions for bond losses over the next four quarters.

Both the benchmark indices, BSE Sensex and NSE Nifty managed to close higher for the second straight session following a fag-end rush for buying stocks.

The 30-share Sensex ended with a gain of 115.27 points and the broader Nifty closed 33.20 points higher.

Besides banks, auto, PSU and power stocks led the rally on bourses, despite weak global cues.

Banking shares gained after the Reserve Bank allowed lenders to spread provisions for bond losses in the third and fourth quarters of the previous fiscal over the next four quarters.

An appreciating rupee against the US dollar also supported the market uptrend.

“Market traded range-bound throughout the day due to volatility in the global market. But towards the close, pace picked up supported by moderation in yield and growth in core sector. Yield declined amid central bank allowing the banks to spread their bond trading losses which gave a positive sentiment to banking stocks...,” Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.

Investors are gradually shifting focus to upcoming Q4 results and RBI policy outcome which will dictate the market outlook in the near term, he added.

The BSE Sensex resumed Tuesday’s session lower from Monday, and slipped further to hit a low of 33,153.83 on a bearish trend in other Asian markets, tracking overnight losses at the Wall Street on weakness in technology shares and trade tension between the US and China.

Later towards the fag-end, it staged a comeback to recover losses to scale a day’s high of 33,402.94, before settling 115.27 points, or 0.35%, higher at 33,370.63.

The gauge had gained 286.68 points in the first session of the new fiscal on April 2.

The 50-share Nifty after moving between 10,171.05 and 10,255.35 on alternate bouts of selling and buying, concluded 33.20 points, or 0.33%, higher at 10,245.

Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 413.16 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 689.75 crore yesterday, provisional data released by the stock exchanges showed.

Shares of Bank of India rose 3.11%, followed by Syndicate Bank 2.75%, Bank of Baroda 2.29%, Indian Bank 2.44%, UCO Bank 1.60%, State Bank of India 1.60% and Bank of Maharashtra 1.82% on the BSE.

Other gainers were Power Grid 1.93%, Bharti Airtel 1.83%, Tata Motors 1.34%, Reliance Industries 0.68%, Asian Paints 0.64% and Sun Pharma 0.48%.

Other banks like Yes Bank, IndusInd Bank, Axis Bank and Kotak Bank also ended in the positive zone, rising by up to 2.11%.

Among the losers were: Wipro 2.02%, ONGC 1.28%, Adani Ports 0.86%, HDFC Bank 0.74%, Bajaj Auto 0.60%, NTPC 0.47% and L&T 0.46% on profit-booking.

In the BSE sectoral pool, power index stayed on top, up 1.57%, followed by infrastructure by 1.17%, PSU by 1.11%, bankex by 1.08%, auto by 0.85%, healthcare by 0.67%, oil and gas 0.62%, metal 0.49% and realty 0.48%.

Broader markets beat the benchmarks, with the small-cap index firming up 1.35% and mid-cap 0.92%.

In Asia, Japan’s Nikkei was down 0.45% and Shanghai’s Composite Index shed 0.84%, while Hong Kong’s Hang Seng gained 0.29%.

In the Euro zone, Frankfurt’s DAX fell 1.41%, while Paris CAC shed 0.85% in early deals. London’s FTSE down 0.72%.