Stock markets registered a strong comeback today, with the BSE benchmark, Sensex, closing 718 points or 2.2 per cent higher at 34,067.
The 50-scrip NSE benchmark index, Nifty, climbed 220 points to settle at 10,250. With this, the domestic equity markets snapped two days of losses, after last week’s announcement by the central bank to inject Rs. 40,000 crore worth of liquidity into the system through bond purchases. The key indices had finished at 7-month lows on Friday.
Things to know:
1) Top gainers on the Nifty 50 were Indiabulls Housing Finance, ICICI Bank, SBI, Adani Ports and Dr Reddy’s Laboratories, closing between advances of 5.3 per cent and 12.5 per cent. Heavy buying across banking, financial services, IT, pharma and energy shares pushed the indices higher on Monday.
2) A sharply positive breadth of the markets favoured the upside, with 1,339 stocks on the NSE finishing higher, and 404 closing lower. On the BSE, 1,817 stocks advanced while 764 declined. Strong earnings from select companies lifted the sentiment, according to analysts.
3) “Markets bounced back from last fortnight’s steep decline led by strong numbers from banking heavyweight ICICI Bank and by the pharma sector,” said Essel Mutual Fund CIO Viral Berawala.
4) ICICI Bank last Friday reported an improvement in its bad loan or non-performing assets ratio in the September quarter. The private sector banking major posted a net profit of Rs. 909 crore for the three months ended September 30.
5) “ICICI’s results stood out, and money is moving there, which is much cheaper than Kotak and HDFC,” cited Naveen Kulkarni, head of research at Reliance Securities, as saying. “ICICI, which has been lagging the other two banks, could now be playing catch-up.”
6) The Nifty Bank and Nifty Financial Services indices comprising banking and financial services stocks respectively ended 2.2 per cent and 2.1 per cent higher.
7) The Reserve Bank of India (RBI) last week announced government bond purchases worth Rs. 40,000 crore ($5.45 billion) via open-market operations in November, as it sought to inject liquidity into a market spooked with fears of a cash crunch, after defaults at a major infrastructure financing company, IL&FS.
8) RBI Deputy Governor Viral Acharya on the same day warned that undermining a central bank’s independence could be “potentially catastrophic”. The speech was a counter to government efforts to relax policies and curtail some powers of the central bank, further opening a rift between the RBI and the government.
9) Buying by institutional investors supported the equity markets. Domestic institutional investors net purchased shares worth Rs. 1,875.89 crore on Friday, offsetting a net sale of Rs. 1,356.66 crore by foreign institutional investors (FIIs) , provisional data from the NSE showed.
10) Sensex and Nifty had shed 2 per cent or 684 points and 1.9 per cent or 194 points respectively, in the past two trading sessions.>