After relentless selling, Indian shares took a breather on Friday to end the day in the green. Markets rose on hopes of more fiscal stimulus and packages coming from central banks around the world. The 30-share Sensex gained 1627.73 points or 5.75% to close at 29,915.56. Broader Nifty50 rose 482 points or 5.83% to close at 8745.45. The benchmarks had been trading in the negative throughout the week as foreign portfolio investors remained sellers after pulling $11 billion from the debt and equity markets.
Globally, South Korea's Kospi which had hit the lower circuit in the previous trading session edged higher by 7.4%. Stock exchanges in Hong Kong, China and Taiwan also ended their day higher, taking cues from Dow Jones which ended in the green on Thursday. European markets were off to a positive start for the second consecutive session. Vinod Nair, head of research, Geojit Financial Services said that the Indian indice gains were a part of a relief rally " The Indian markets were in sync with Asian and European markets. It was more of a relief rally driven by technicals rather than any fundamental change in outlook. Hopes of further stimulus from Central banks across the world to contain the economic damage boosted global market," he said. Brent crude prices inched 6.12% higher from its previous close and was trading at $29 per barrel.
Bank Nifty, however, severely underperformed the broader markets ending its day up by 1.17%. In the previous trading session, Nifty Bank had touched its lowest level since February 2017. Sorbh Gupta, associate fund manager, Quantum Mutual Fund, explained that the banking sector is a leveraged business and so, will always face sharp corrections where there is uncertainty in the economy. " In the last three years, maximum re-rating has also taken place in large private banking stocks which leaves more room for correction, which is what could be leading to the correction," he said before adding that Nifty Bank enjoys as much as 40% weight in the Nifty. Bandhan Bank and Kotak Mahindra Bank helped were the biggest gainers on Nifty Bank. Shares of HDFC Bank had fallen as much as 8% during the day's trade after global brokerage Bernstein raised concerns regarding the succession planning in the bank and concerns on asset quality of the bank. HDFC Bank shares closed 1.6% lower on Nifty Bank at Rs 881.25 a piece. Ambareesh Baliga, an independent market expert, said that the threat of rising non-performing assets (NPAs) in the ongoing economic slowdown could also be holding investors back from investing in banking stocks.
The biggest gainers on Sensex were ONGC, Ultratech Cement and Hindustan Unilever while the losers were HDFC Bank and IndusInd Bank. According to market experts, Indian markets also rose on the anticipation of the fiscal package being announced by the central government. " Industry bodies have been making recommendations on possible financial measures that could be taken. If that comes through, it would be a positive for different industries, especially small and medium scale and will help India come out of a slowdown faster. This along with low oil prices will be a positive for the Indian markets," said Baliga.
The overall market breadth on the index was positive with BSE Midcap and BSE Smallcap were up 4.18% and 4.03% respectively. All the 19 sectoral indices compiled by the BSE ended their day in the green. The biggest gainers sectorally were Energy, Oil and Gas as well as Technology. The stocks that gained more than 10% in Friday's trade were Bharti Infratel, ONGC, Gail, Ultratech Cement, and Dr Reddy's laboratories among others.