Sensex, Nifty Close 2% Higher As Financial Stocks Extend Gains

Analysts awaited macroeconomic data for more clarity on the economic damage caused by the coronavirus pandemic.

Sensex, Nifty Close 2% Higher As Financial Stocks Extend Gains

Gains in banking and financial services stocks supported the markets

Domestic stock markets jumped nearly 2 per cent on Thursday, extending gains to a second straight day, led by strong buying interest in banking and financial services stocks. The S&P BSE Sensex index jumped as much as 1.89 per cent - or 597.13 points - to touch 32,202.35 during the session, and the broader NSE Nifty 50 climbed to as high as 9,490.65, having started the session higher at 9,364.95 compared to its previous close of 9,314.95. Gains in banking and financial services stocks led the markets to higher levels.

The Sensex ended 595.37 points - or 1.88 per cent - higher at 32,200.59, and the Nifty settled at 9,488.45, up 173.50 points - or 1.86 per cent - from its previous close.

In the 50-scrip Nifty index, 42 stocks moved higher for the day. Zee Entertainment, Eicher Motors, Larsen & Toubro, Hero MotoCorp and HDFC Bank - ending between 4.85 per cent and 9.58 per cent higher - were the top percentage gainers.

On the other hand, Wipro, ITC and Cipla were the top Nifty laggards, declining 0.92 per cent, 0.60 per cent and 0.52 per cent respectively.

HDFC Bank (ending 4.56 per cent higher), HDFC (3.46 per cent) and Reliance Industries (1.78 per cent) alone accounted for a gain of more than 300 points in the Sensex.

The Nifty Bank index - comprising stocks of 12 major lenders in the country - which has fallen over 40 per cent so far this year jumped as much as 3.98 per cent during the session before settling with a gain of 2.45 per cent, having surged 7.28 per cent the previous day. .

"The banking stocks have been a major underperformer and drag in the Indian markets. Some stocks hit fresh lows and traders chipped in and sought bargains," said Saurabh Jain, assistant vice president of research at SMC Global Securities. 

However, analysts say the current bouts of surge might not sustain for long.

"Because of the global liquidity, foreign institutional selling has reduced in the Indian market. Also, the financial stocks were heavily beaten down and markets had under performed compared to global peers," said Neeraj Dewan, director at Quantum Securities.

"There are concerns with respect to the banking sector and the delinquency which is going to rise. This surge mostly looks like a small bounce," Mr Jain added.

Analysts awaited macroeconomic data for more clarity on the economic damage caused by the coronavirus pandemic. The government will release data on GDP or gross domestic product for the quarter ended March 31 at 5:30 pm on Friday.

Shares elsewhere in Asian moved on a mixed note, with MSCI's broadest index of Asia Pacific shares outside Japan declining 0.26 per cent. Hong Kong's Hang Seng index and South Korea's KOSPI benchmark dropped 0.72 per cent and 0.13 per cent respectively. Japan's Nikkei and China's Shanghai Composite barometers rose 2.32 per cent and 0.33 per cent respectively.

The E-Mini S&P 500 futures were last seen trading 0.02 per cent lower, indicating a flat start for Wall Street on Thursday.

European shares started the day on a positive note. The United Kingdom's FTSE benchmark rose 0.83 per cent, while France's CAC climbed up 0.99 per cent and Germany's DAX 0.55 per cent.