February 28, 2024


Delighting finance buffs

Sensex, Nifty jump over 1{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} as financial stocks lead market rally

Indian stocks jumped more than one per cent on Thursday, driven by a surge in financials for a second day as some investors found value in beaten-down banking stocks, while a broadly positive global mood also helped the rally.

The NSE Nifty 50 index rose 1.25 per cent to 9,431 by 10:46 am, while the S&P BSE Sensex gained 1.18 per cent to 31,973.

On Wednesday, Indian shares ended over 3 per cent higher, fuelled by a more than 7 per cent surge in the banking index.

“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 in New Delhi.

“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,” Jain added.

Positive global cues and institutional buying in domestic private banks also forced investors to cover their short positions leading to the surge, analysts said.

The Nifty banking index, which has fallen about 40 per cent so far this year, gained 3.1 per cent on Thursday.

India may need to inject up to 1.5 trillion rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic, three government and banking sources told Reuters.

Meanwhile, Asian shares and US stock futures rose on Thursday as growing optimism about economic recovery from the pandemic trumped immediate concerns about a standoff between the United States and China over Hong Kong.

HDFC Bank Ltd and Housing Development Finance Corp Ltd rose 3.7 per cent and 3.4 per cent, respectively and were the top boosts to the Nifty 50 index.

Shares in IndusInd Bank Ltd surged 8.3 per cent, while Axis Bank Ltd rose 4{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}, leading gains in the banking index.

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