The Sensex spurts 610 points on Monday to finish above the 52,000-mark for the first time while the Nifty soared past 15,300 because of strong buying in banking and financial stocks amid a bullish trend overseas. Supportive macroeconomic data and continued foreign fund inflows added to the momentum.
The Nifty Bank jumped by 3.32%, helped by the movement in heavyweights such as State Bank of India (up 4%), ICICI Bank and HDFC Bank. These stocks hit their record highs during the day. This has also triggered a rally in other PSBs such as Punjab National Bank and Bank of Baroda.
The Nifty Bank has gained 22% so far this month while the Nifty is up by 12.3%. The biggest gainers on the Nifty Bank on Monday were Axis Bank, RBL Bank, ICICI Bank, SBI and IDFC First Bank, up by 6.21%, 5.61%, 4.16%, 3.96%, and 3.74%, respectively.
Shares of public sector banks, which have underperformed their private peers, are expected to play catch-up going forward if the asset quality holds up.
According to experts, in the current market scenario, a higher beta portfolio is likely to do well. Naveen Kulkarni, chief investment officer, Axis Securities, said: “The market rally has been strong and India has multiple triggers, which include containment of Covid-19 infections, blockbuster Budget and economic revival. BFSI should be the top sector in the portfolio, followed by discretionary, cyclicals and some allocation to industries.”.
The markets also reacted positively to the macroeconomic numbers – the CPI inflation in January at 4.1% is the lowest in 16 months while the IIP in December returned to a growth path after contracting in November.
Foreign portfolio investors bought stocks worth $2.9 billion so far in February, which have helped the market rally.
Global markets surged after crude oil prices rose to a 13-month high. Brent crude was up 88 cents, or 1.4%, at $63.31 a barrel at 1320 GMT, after climbing to a session high of $63.76, the highest since January 22, 2020. Moreover, rollout of Covid-19 vaccines and a fiscal stimulus in the US kept the markets buoyant. The markets in Germany, France, and the UK were up by 0.39% to 1.6%.
Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “Global cues were positive on optimism about the rollout of Covid-19 vaccines and new US fiscal aid, while tensions in the West Asia drove oil to a 13-month high.”