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Sensex gains for 5th day despite crude hits $71/bbl; oil retailers crack, PSU banks dip

Nifty PSU Bank was the biggest loser among sectoral indices, falling 2 percent while IT and Metal indices gained 1.5 percent each.

Market extended gains for fifth consecutive session amid consolidation on Wednesday despite crude oil prices hit more than three years’ high. Investors shifted focus to corporate earnings that will begin later in the week and also look for macro data due tomorrow after the trade war tensions eased in previous session.

The Nifty managed to close above 10,400 levels, rising 14.90 points to 10,417.20 while the 30-share BSE Sensex gained 60.19 points at 33,940.44.

Experts expect the consolidation to continue for couple of days as investors want to watch corporate earnings before taking fresh positions. The market already rallied more than 4 percent from 2018 lows and further upmove is likely depend upon earnings performance, they suggest.

“January was a good month for the market, but the Street saw a correction of more than 10 percent from all time high levels seen earlier.

Now we are seeing a pullback rally and beaten down stocks have performed well from the upmove we are seeing from March 23. We could see another 100-200-point spike, as the earnings season is about to start.

Major part of the focus will be on earnings season,” AK Prabhakar, Head — Research, IDBI Capital, told.

The Street will watch out for the management commentary as well, which is currently worrisome, he said.

Chola Securities, which also said investors would keenly await signs of pick-up in corporate earnings in the upcoming Q4FY18 earnings season, expects in the medium term the markets to be watchful of the outcome of investigations in banking space post PNB scam.

On the global front, investors will closely watch the FOMC minutes of the March meeting due later in the day, to check the view of FOMC members about further interest rates hikes.

Equities in Europe were mildly lower as investors started to focus on earnings. France’s CAC and Germany’s DAX were down 0.3 percent each at the time of writing this article.

Asian stocks closed mixed on Wednesday after easing of trade war fears in the last session. China’s Shanghai Composite and Hong Kong’s Hang Seng ended up 0.6 percent each while Japan’s Nikkei and Australia’s ASX 200 fell 0.5 percent each.

Oil rebounded, trading again near its highest levels in three years due to political tension in the Middle East. Brent crude oil futures were trading at USD 71.22 a barrel, up 0.25 percent while US crude oil at USD 65.84 a barrel, up 0.5 percent at the time of writing this article.

Oil retailers HPCL (down 7.66 percent), BPCL (7.5 percent) and IOC (6.66 percent) were biggest losers among Nifty50 stocks after higher crude oil prices. Even for country like India, which imports more than 80 percent of its oil requirement, is a big hit on fiscal front.

Government may not allow them to pass on the higher petroleum prices in an election year to consumers and that has led to sharp de-rating of government oil marketing companies, VK Sharma of HDFC Securities said.

State-owned oil & gas exploration companies ONGC and Oil India gained more than a percent.

Nifty PSU Bank was the biggest loser among sectoral indices, falling 2 percent after spike in bond yields. The 10-year government bond yield inched up by 10 basis points intraday, which could put further pressure on treasury income of PSU banks.

PNB, Bank of India, IDBI Bank, Syndicate Bank, Canara Bank, Andhra Bank, SBI, Union Bank and Bank of Baroda were down up to 3 percent while ICICI Bank, Yes Bank and Axis Bank were down 1-2 percent.

IT and Metal indices gained 1.5 percent each.

Vedanta was the top gainer among Nifty50 stocks, rising 4.5 percent followed by Reliance Industries, TCS, Infosys, Eicher Motors, Titan Company, HUL, Sun Pharma, Kotak Mahindra Bank and HCL Technologies that gained up to 2.6 percent.

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