Sensex Surges 425 Points Before Paring Some Gains

Indian markets surged today amid strong gains in index heavyweight HDFC Bank and other banking stocks. The Sensex rose as much as 425 points at day's high to 28,726 in early trade before paring some gains. Shares of private sector lender HDFC Bank rose as much as 9 per cent after Reserve Bank of India removed restrictions placed on foreign institutional investors on the purchase of shares of the private lender with immediate effect. Foreign ownership in private banks is restricted to 74 per cent, a limit which is periodically reviewed by the Reserve Bank. With RBI removing restrictions, foreign institutional investors can now buy HDFC Bank shares from the exchanges.

The upsurge in HDFC Bank shares also boosted sentiment in other financial services stocks. Yes Bank, IndusInd Bank and HDFC were among other top Nifty50 gains. However, some profit-taking in metal and IT stocks capped overall gains. 

TCS, Infosys and Hindalco were down between 1.5 per cent and 2 per cent. Anil Manghnani of Modern Shares and Stock Brokers says Nifty has support at 8,700 and resistance at 8,950 on the higher side at 8,950.

Midcap and smallcap stocks were also in demand with BSE midcap and smallcap indices rising over 0.40 per cent.

At 10:50 am, the Sensex was up nearly 170 points at 28,470 while Nifty rose 41 points at 8,819, off its day's high of 8,896.

Asian stock markets took a breather on Friday from their recent surge as investors booked profits, while the dollar inched up after Thursday's slide and optimism over possible renewed supply cuts by OPEC lifted oil prices.  MSCI's broadest index of Asia-Pacific shares outside Japan pulled back 0.1 per cent, on track to end the week up 1.3 per cent, its fourth straight weekly gain. Overnight, Wall Street lost momentum, with the Dow Jones Industrial Average barely eking out its sixth straight record high, while the S&P 500 and Nasdaq snapped a seven-day winning streak as investors slowed buying to digest recent gains. (With Agency Inputs)