Banking stocks lifted the Indian equities in a volatile trading session on Tuesday, helping the benchmarks end higher for the fifth straight session. The markets were tracking the mixed cues coming from Asian counterparts, and their gains remained capped in the absence of any major domestic trigger.
The benchmark Sensex was up 0.51% or 187.24 points to close at 36,674.52. The 50-share index Nifty ended the day up 36 points or 0.33% to close at 10,799.65. Nifty Bank rose 1.9% during the day’s trading session.
The 50-share index hit a 10,689.7 during the day’s trading session, tracking mixed performance of Asian stock markets. The benchmarks were lifted with the help of financial stocks, which delivered a strong performance during the day’s trading session.
Nifty Bank rallied 1.9% to close at 22,628. The biggest gainers among banking stocks were Bandhan Bank, IndusInd Bank, RBL Bank, Federal Bank, and IDFC First Bank — up by 9.54%, 5.86%, 4.52%, 4.19%, and 3.68%, respectively.
Even though the banking stocks delivered a strong performance on Tuesday, they have majorly been underperformers since the pullback rally that started in April.
According to a HDFC Securities Institutional Research report, commentary from banks indicated that the individuals applying for moratorium trended upwards from March to April and had been trending downwards since then. The brokerage expects polarisation among the banks to continue. “Large banks, with strong, granular liability franchises, reasonable asset quality performance and sufficient capital will fare better as the sector is likely to see increased polarisation to remain unchanged and has in fact been fortified,” said HDFC Securities Institutional Research in its report.
The foreign portfolio investors on Tuesday bought stocks worth $110.9 million, according to the provisional data on the exchange. Domestic institutional investors sold stocks worth $104.8 million. The FPIs in July bought stocks worth $247.5 million, while they have continued to remain buyers throughout the month, their velocity of buying has reduced. The futures and options segment on Tuesday witnessed a turnover worth Rs 14.59 lakh crore against the six- month average of Rs 14.49 lakh crore.
Foreign stock markets in Asia and Europe were trading in the red. Bourses in Asia, barring China, ended in losses with Taiwan, South Korea and Hong Kong closing the day from 0.2% to 1.38% lower. China’s Shanghai composite surged 0.37% after the state media, in the previous session, had announced that creating a bull market for the country was essential for the economic recovery.
Tao Wang, economist at UBS Securities, said, “In normal circumstances the Chinese consumer’s behaviour is a critical factor, not only for China’s economic expectations, but also for many other related international industries. In the aftermath of the pandemic, as China is among the first to enter and exit Covid-19 mobility restrictions, its path and pattern of consumption recovery may shed light on recoveries elsewhere.” European markets, however, were trading lower at the time of press, with stock markets in France, Germany and the UK trading 1% to 1.9% lower. The Dow Jones mini futures 258 points at the time of press.
The biggest gainers on Nifty were Bajaj Finance, IndusInd Bank, Bajaj Finserv, Eicher Motors and ICICI Bank up by 7.76%, 5.86%, 4.47%, 3.89%, and 3.52%, respectively. The biggest losers were Adani Ports and SEZ, Power Grid Corporation, Grasim, BPCL, as well as ITC down by 3.53%, 2.98%, 2.87%, 2.72%, and 2.65%, respectively. Among the broader markets, Nifty Midcap and Nifty Smallcap were up by 0.4% and 1%, respectively Sectorally, the biggest gainers were Nifty Private Bank, Nifty Bank, Nifty IT, Nifty Financial Service, Nifty Media, and Nifty Auto.