Sensex, Nifty rise in early trade; Bandhan Bank, ICICI Bank, Kotak Bank surge up to 6%

Domestic equity markets opened higher on Monday and extended its gains. Dalal street tracked cues from buying in select heavyweights and US stocks, which settled with big gains during over the weekend trade. However, foreign investors remained net sellers in the Indian equity markets.

Major Asian markets observed a holiday on Monday on the account of Lunar New Years, whereas Japan and Australia advanced in the early gains. Upbeat operating performance by India Inc in the December 2022 quarter supported the market sentiments.

At 9.35 am, the 30-share pack BSE Sensex was trading 364.46 points or 0.60 per cent higher at 60,986.23, whereas NSE's Nifty50 surged 101 points or 0.56 per cent to trade at 18,128.50. Broader markets underperformed headline peers as BSE midcap index was marginally up, whereas smallcap index was trading flat. Fear gauge India VIX spiked about 3 per cent to 14.15-level.

The Nifty has made a strong base around 17800 over the past four weeks despite global volatility and in the process underwent shallow retracement, said ICICIDirect Research.

"We expect the index to witness a pre-Budget rally and gradually head towards 18,500 in coming weeks as it is 61.8 per cent retracement of December decline. In the process, any cool off from here on would find its feet around 17,800. Thus, dips should be capitalized on to accumulate quality stocks," it said.

Only Nifty realty index was trading lower in red after poor update from Oberoi Realty, which raise concerns for the sectors. Among the gains, banks, financials and auto stocks led the rally, whereas FMCG and IT stocks also supported the sentiments.

On the Nifty 50 index, Tata Motors and Hindalco topped their gainers with a 2 per cent rise. Kotak Mahindra Bank and ICICI Bank were also up after strong quarterly performance. Hero Motocorp, State Bank of India, Power Grid, UPL, Tata Consultancy Services and IndusInd Bank also supported the sentiments.

Among the losers, Ultratech Cement plunged 2 per cent after poor quarterly earnings on Friday. Adani Group's flagship firm Adani Enterprises and Adani Ports continued to weaken a per cent each. NPTC, Bajaj Finserv and JSW Steel shed a per cent each.

Early Q3 results broadly have been positive with IT companies and banks delivering good results. This trend continues with the latest results from ICICI and Kotak Bank. Reliance, too, has delivered a decent set of numbers, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Positive news from the Fed meeting outcome and the Union Budget on February 1 can take the market higher. On the contrary, if the Fed message and the Budget deliver negative news, the lower end of the range can be broken. Sustained FII selling is a near-term negative. Investors may wait for and watch these crucial numbers," he said.

YES Bank's shares plunged 12 per cent in Monday's trade after flop show in the December 2022 quarters and the Bombay High Court quashed a decision taken by the YES Bank administrator's March 2020 decision to write-off of additional Tier-1 (AT1) bonds.

Among other losers in the broader markets, Meghmani Organics tumbled 8 per cent, whereas Craftsman Automation, Nykaa and JSW Energy plunged 5 per cent each. On the contrary, Restaurants Brands Asia, Bandhan Bank, and eMudhra gained up to 5-6 per cent each.

Also read: Q3 results previews: Axis Bank, Canara Bank, Route Mobile, Gland Pharma & KEI Industries

Also read: YES Bank shares plunge 12% on Bombay HC order, poor Q3 results. Full details, analyst views & more