Banks' rally post PNB earnings helps Sensex, Nifty settle at fresh record closing high

Moneycontrol News

The market set a fresh record closing high on Friday, driven by a further rally in banks in late trade, especially after PNB reported strong earnings and asset quality improvement. It was partly driven by global cues.

The 30-share BSE Sensex was up 112.34 points at 33,685.56 while the 50-share NSE Nifty ended above 10,450 level for first time, rising 28.70 points to 10,452.50.

"We're reiterating bullish view and suggest following the trend. We will review target at 10,600 in Nifty," Jayant Manglik, President, Retail Distribution, Religare Securities said.

Almost all the sectors are contributing in the rally now but one needs to be selective, citing the ongoing earnings season, he advised.

Nikhil Kamath, Co-Founder and Head of Trading, Zerodha also foresees the bull trend continuing in the near future.

"Results season looks to have turned to the positive, overall outlook for the economy is also again changing to the positive. Domestic inflows continue to be robust, whereas FII activity remains lackluster," he reasoned.

For the week, the Nifty gained 1.25 percent and the Sensex increased 1.6 percent while Nifty Midcap rose 2.3 percent.

Banks led the charge today, with the Nifty Bank rising 0.88 percent and PSU Bank gaining 3 percent. Strong earnings by Punjab National Bank, one of the largest among top three PSU banks, indicated that asset quality concerns may be easing soon.

PNB was biggest gainer, rising 5 percent after better-than-expected earnings, and sharp fall in slippages QoQ. SBI (ahead of earnings on November 10) and IndusInd Bank rallied 3 percent each. Yes Bank, Axis Bank, HDFC Bank and HDFC were up 0.5-1.7 percent while ICICI Bank lost 0.2 percent.

Hindalco Industries was down half a percent after the profit fell 11 percent due to one-time loss, but EBITDA was ahead of estimates in September quarter.

Tata Motors, L&T and ONGC among others rallied 2-3 percent whereas Power Grid (post earnings), Sun Pharma, Coal India, BPCL, GAIL and Hero MotoCorp were down 1-2 percent.

In broader space, Amtek Auto, Castex Technologies, Metalyst Technologies and JMT Auto closed at upper circuit, surging 10-20 percent after Bharat Forge said it is in race to acquire debt-laden Amtek Auto under the NCLT process.

Jet Airways, Arvind, Adani Enterprises, Brigade Enterprises, DHFL, Biocon, Graphite India, HEG and Hindustan Copper were up 3-8%. Godrej Properties (despite strong earnings), Edelweiss Financial (despite strong earnings), Ruchi Soya (profit booking after a rally in previous session), Andhra Bank (post earnings) and PFC (post earnings) were down 2-5 percent.

Titan was up 0.6 percent ahead of earnings that announced after market hours. September quarter earnings beat estimates on all parameters, with profit growing 67 percent YoY on robust jewellery business.

On the global front, European markets edged higher amid corporate earnings while Asian markets closed mixed. Investors digested US' tax-reform plan and President Donald Trump's nomination of Jerome Powell, Federal Reserve Governor, to be the next head of the central bank.