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Amidst volatility, benchmark indices managed to regain momentum towards closing hours to end on a positive note on Tuesday. The Sensex regained the 50,000-mark on the back of a strong rally in banking stocks.
The Supreme Court verdict allowing waiver of interest on interest (compound interest) with respect to the loan moratorium scheme availed by borrowers, extended by the Reserve Bank of India (RBI) from March 1 to August 31 in view of the Covid-19 pandemic, boosted the sentiment.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities rebounded sharply despite weak global cues mainly supported by sharp recovery in Financials. The Supreme Court pronounces that waiver of compound interest during loan moratorium should be for all. While there is still ambiguity about who will be bearing the additional burden, the comfort about the possible end of uncertainty about banks’ NPAs led bank stocks to see sharp up-move.”
The BSE Sensex closed at 50,051.44, up 280.15 points or 0.56 per cent. It hit an intraday high of 50,264.65 and an intraday low of 49,661.92. Nifty 50 closed near the day’s high at 14,814.75, up 78.35 points or 0.53 per cent. During the closing hours, it rose to a high of 14,878.60; it touched an intraday low of 14,707.
As many as 1,666 have advanced on the BSE, 1,293 have been declined while 214 remain unchanged. 166 securities hit their 52-week high while 52 hit their 52-week low. 318 securities hit the upper circuit
“A resurgence of Covid-19 cases in various parts of the country and resultant restrictions still pose a challenge to market in the near term,” added Modi.
Ultratech Cement, HDFC Bank, ICICI Bank, IndusInd Bank and Titan were among the top gainers on Sensex while Bajaj Auto, Bajaj Finance, Sun Pharma, Asian Paints and Kotak Bank were among the top laggards.
Vinod Nair, Head of Research at Geojit Financial Services said, "Domestic market ended the day on a strong footing supported by a rally in banking stocks amidst weak cues from global markets. Sentiments in the banking stocks were lifted post Supreme Court’s order against granting interest waiver and extension of moratorium period. Its decision to not charge compound interest added a minor concern in the banking space. In the global space, European markets pulled back as rising covid infections reflected lockdown worries."
S Ranganathan, Head of Research at LKP Securities said, "Tuesday's trade witnessed Cement stocks continue their upward momentum for the second consecutive day after the lower house approved the amendments to the MMDR Act. With the interest waiver case on loan moratorium decided today, investors value picked on PSU banks selectively."
Sectoral indices
Among the sectoral indices, all except Nifty FMCG, Nifty Metal and Nifty Media closed in the green. Nifty PSU Bank recorded the highest gains at 2.91 per cent. Nifty Bank regained momentum and was up 1.73 per cent at closing. Nifty Private Bank was also up 1.73 per cent.
Broader indices end in the green
All broader indices closed in the green. Nifty Midcap 50 was up 0.97 per cent at closing while Nifty Smallcap 50 gained 0.12 per cent. The S&P BSE Midcap was up 0.95 while the S&P BSE Smallcap was up 0.75 per cent.
“Notably, strong buying in midcap and smallcap stocks continued to remain visible for second consecutive day after recent corrections,” said Modi.