The benchmark S&P BSE Sensex climbed 0.7% to 34,969.70 points at the close in Mumbai, the highest since February 2. The NSE Nifty 50 Index also rose 0.7% to 10,692.30. Axis Bank climbed the most on both gauges after its unprecedented recognition of bad loans came as a relief to investors. State Bank of India and ICICI Bank were the other top gainers among banks. Reliance Industries climbed to a record high ahead of its earnings report.
“Quarterly earnings so far have been better than estimates, barring minor disappointments,” said Gaurang Shah, chief investment strategist at Geojit Financial Services in Mumbai. “Banks are likely to do extremely well as they transition from stress recognition to stress recovery over the next few quarters, which will translate into positive sentiment for broader markets.”
Axis Bank climbed as much as 13% after outgoing chief executive officer Shikha Sharma said recognition of bad loans in this cycle is “nearly complete” after the lender posted its first-ever quarterly loss after provisioning for non-performing loans. Maruti Suzuki India fell 1.8% after its fourth quarter net income missed analyst estimates.
Of the 12 Nifty companies that have reported their January to March earnings so far, net incomes at six have matched or beaten analyst estimates, according to data compiled by Bloomberg. Sixteen of the 19 sector gauges compiled by BSE Ltd gained, paced by the S&P BSE India Bankex and the S&P BSE India Energy Index. The NSE Volatility Index fell 0.2%.
Meanwhile the rupee yesterday was trading little changed against US dollar as traders avoided taking long positions ahead of the long weekend.
Money markets are closed on April 30 and May 1 due to Budha Jayanti and Maharashtra Day respectively.
The home currency was trading at 66.78 against US dollar, down 0.04% from its Thursday’s close of 66.76. The rupee opened at 66.81 and touched a low of 66.84 a dollar. Yields on 10-year government bond stood at 7.761% from its previous close of 7.756%. Bond yields and prices move in opposite directions.
So far this year, the rupee has fallen 4.32%, while foreign investors have bought $1.37bn and sold $1.07bn in equity and debt markets, respectively.