Late rally in banks lift Sensex 257 pts, Nifty above 10,800; HDFC and Bajaj Fin twins lead

The market staged smart rally in the late trade on Friday with the Sensex rising more than 250 points, backed by banking & financials, FMCG and pharma stocks. But Reliance Industries, which was down 1.9 percent, capped some gains.

Globally investors awaited the outcome of OPEC meeting due later in the day, and also monitor trade developments between the world's largest economies US and China.

The 50-share NSE Nifty strongly closed above 10,800-mark, rising 80.80 points to 10,821.90.

The 30-share BSE Sensex rallied 257.21 points to 35,689.60 but the market breadth was in favour of bears. About 1,401 shares declined against 1,159 advancing shares on the BSE.

"Nifty gained over half a percent and reclaimed 10800, thanks to strong surge in index majors in last hour. We believe Nifty would extend this positive bias but recovery in broader market is equally essential," Jayant Manglik, President, Religare Broking said.

He expects private banking and financials counters to do well along with select pharma and FMCG majors. "Traders should prefer these sectors for fresh longs while recovery in PSU banks and metal should be used to reduce long positions, if any."

For the week, the Sensex and Nifty ended flat while Nifty Bank gained over a percent.

The broader markets today slightly underperformed frontliners, with the Nifty Midcap rising half a percent.

The sectoral trend was mixed during the day but in last hour of trade, all sectoral indices turned positive with the Nifty Bank, Financial Services, FMCG and Pharma gaining 1-1.8 percent.

"Over the last couple of months, there has been a clear polarisation in terms of sectoral & stock performances. The Sensex & Nifty have remained strong on the back of few large cap stocks & market leaders seeing incremental flows & buying interest at the expense of mid & small sized companies, which have seen selling pressure," Devang Mehta, Head – Equity Advisory, Centrum Wealth Management told Moneycontrol.

While markets have rewarded businesses which exhibit good earnings growth, the companies which have failed to deliver on promises have been punished, he said. "Valuations & price points in a lot of good stocks have started to look attractive & it is important to take advantage of the volatility for adding/accumulating robust businesses with good growth prospects."

HDFC (up 2.6 percent), HDFC Bank (1.25 percent), Bajaj Finance (3.5 percent), ITC (1.65 percent), and Bajaj Finserv (3 percent) were leading contributors to the Nifty gains.

Non-banking finance company Bajaj Finance (Rs 1,35,129.01 crore) surpassed private sector lender Axis Bank (Rs 134,726.72 crore) in terms of market capitalisation.

Sun Pharma was the biggest gainer among Nifty50 stocks, rising 4 percent followed by M&M, Axis Bank, SBI, ICICI Bank and Indiabulls Housing Finance that gained 1-3 percent.

Apart RIL, TCS, Eicher Motors, HPCL, IndusInd Bank and UPL were other losers among largecaps.

IDBI Bank gained 2 percent as sources told CNBC-TV18 that state-run insurance major LIC is in discussion with government to pick up significant minority stake in the bank.

MTNL share price rallied 8 percent as reports indicated that Department of Telecommunication may discuss the revival plan for the company and BSNL with prime minister's office today.