Indian market benchmark Sensex extended its rally for the second session yesterday, soaring 167 points to end near five-month highs on widespread buying in pharma and bank counters.
Pharma stocks were galvanised by a slew of approvals granted by foreign regulators, while HDFC Bank zoomed to its 52-week high after Reserve Bank of India (RBI) on Thursday allowed foreign investors to increase stake in the lender.
The central bank put HDFC Bank back on the FII ban list after foreign shareholding exceeded the prescribed limit of 74% within hours of trading.
Sentiment also got a boost after RBI Governor Urjit Patel said India’s economic growth will make a “sharp V” recovery after a short drop in the aftermath of demonetisation.
The 30-share BSE Sensex, which opened higher with a gap at 28,670.43, touched a high of 28,726.26 after participants widened their bets on foreign fund inflows amid persistent buying by domestic institutional investors.
However, profit-booking dragged it to a low of 28,410.91, before the gauge finally settled 167.48 points, or 0.59% higher at 28,468.75.
The Sensex last closed at 28,668.22 on 23 September 2016. The index had gained 145.71 points in the previous session. The 50-share NSE Nifty, after moving between 8,896.45 and 8,804.25, finally settled 43.70 points, or 0.50% higher at 8,821.70. For the better part of the day, both the key indices remained in the tight grip of bull operators, forcing bears to remain on the sidelines.
Both Sensex and Nifty recorded their fourth straight weekly gains by surging 134.50 points, or 0.47%, and 28.15 points, or 0.32%, respectively. HDFC Bank skyrocketed to Rs1,450, before succumbing to profit-booking and closing at Rs1,377.15, up 3.75%.
Sun Pharma emerged as the star performer and closed 4.03% up at Rs675.45, while Cipla rallied 1.58% to Rs592.60. “Today’s rally was led by banking stocks, particularly backed by HDFC Bank. HDFC Bank stock rose by over 9% in early trade after RBI removed restrictions imposed on foreign investors’ holdings,” online broking firm Upstox’s Director Raghu Kumar said.
Foreign portfolio investors (FPIs) sold shares worth a net Rs215.69 crore on Thursday, as per provisional data. Globally, Asia and Europe traded lower after Wall Street’s Trump-fuelled surge finally came to an end.
In Europe, key indices such as London’s FTSE, Paris CAC 40 and Frankfurt fell by up to 0.69% in early trade.
Meanwhile the rupee yesterday closed stronger against the US dollar, after local equity markets gained over 165 points.
The home currency closed at 67.02 — up 0.08% from its previous close of 67.07. The local currency opened at 67.12 a dollar and touched a high and a low of 66.99 and 67.15, respectively.
Traders are focusing on the goods and services tax (GST) meet and results of the upcoming state elections on 18 February and 11 March, respectively.
India’s 10-year bond yield closed at 6.852% compared to its Thursday’s close of 6.846%. Bond yields and prices move in opposite directions.
India’s benchmark Sensex index rose 0.59% or 167.38 points to close at 28,468.75. So far this year, Sensex has risen 7%.
Since the beginning of this year, the rupee has gained 1.4%, while foreign institutional investors have bought $402.60mn and $563.50mn from local equity and debt markets, respectively.
Asian currencies were trading lower. South Korean won was down 0.31%, China renminbi 0.16%, Indonesian rupiah 0.11%, Malaysian ringgit 0.1% and Singapore dollar 0.06%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.48, up 0.04% from its previous close of 100.44.
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