NEW DELHI: A sharp bout of short covering in bank, financial, auto, IT, FMCG and metal stocks in the second half of the session helped domestic equity benchmarks end Mondays session with decent gains.
The market logged gains after three consecutive sessions of losses amid reports that the government has decided to rescue the cash-strapped Infrastructure Leasing & Financial Services (IL&FS) by superseding the board of the company and changing the company management.
The report infused positive sentiment in the equity market.
Reports that Reserve Bank of India (RBI) would buy Rs 36,000 crore worth of government bonds under its open market operations (OMOs) this month – a move aimed at easing liquidity conditions in the market – also helped sentiment.
At the macro front, the Nikkei India Manufacturing Purchasing Managers' Index showed that Indias manufacturing sector activity improved in September amid gains in new orders, output and employment. The print came in at 52.2 for September, up from 51.7 in August. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
Global cues also eased after the US and Canada agreed to move ahead with the revamped NAFTA. Optimism about a reconstituted free trade agreement among the US, Canada and Mexico and what it could mean for trade relations elsewhere helped world markets kick off the fourth quarter of the year on a positive note, Reuters reported.
The 30-share Sensex closed 299 points, or 0.83 per cent, higher at 36,526 with 22 stocks ending in the green. NSEs Nifty50 settled 78 points, or 0.71 per cent, higher at 11,008, with 34 stocks advancing and 16 stocks declining.
BSE Midcap and Smallcap indices trailed Sensex on Monday, closing 0.53 per cent higher and 0.25 per cent down, respectively.
Lets take a look at what hogged limelight in Monday's session:
Buying in largecaps boosts Sensex
HDFC twins, TCS, Infosys, ICICI Bank, YES Bank, SBI and HUL contributed most to the rally in Sensex. In terms of percentage gains, YES Bank (9.68 per cent), TCS (3.26 per cent), HDFC (3.16 per cent), SBI (3.04 per cent) and ICICI Bank (3 per cent) led the Sensex gainers.
YES Bank snaps two-session losing streak
Shares of YES Bank clocked strong gains after it released its unaudited financial results for the quarter ended September 2018. The company registered 41 per cent year-on-year rise in deposits at Rs 2.23 lakh crore in Q2FY19, while the Casa ratio grew 28.20 per cent YoY.
Bandhan Bank hit record low
Shares of Bandhan Bank hit a lower circuit limit of 20 per cent at Rs 451.20 after RBI last week restricted the lender from opening branches freely and froze remuneration of founder managing director Chandra Shekhar Ghosh at the existing level. RBI punished the bank for failing to reduce promoters' stake to below 40 per cent and told the lender to take prior permission before branch expansion. In an attempt to assuage investors, the bank said it would explore inorganic route to pare promoter stake.
IL&FS group stocks gain
Shares of IL&FS group of companies clocked robust gains. Shares of IL&FS Engineering and Construction Company (up 20 per cent), IL&FS Transportation Networks (up 19.51 per cent) and IL&FS Investment Managers (up 10 per cent) settled up to 20 per cent higher. Shares of the companies jumped on reports that the government decided to supersede the IL&FS board and change the company management. The governments intervention came after IL&FS defaulted on repayments and has had its debt rating downgraded, which has, in turn, roiled the markets. The net-owned funds of the finance company have been wiped out. The IL&FS group has a total debt obligation of over Rs 90,000 crore, of which bank loans account for Rs 57,000 crore, mostly from state-run lenders.
Airline stocks plunged
Aviation stocks TAAL Enterprises (down 4.99 per cent), Global Vectra Helicorp (4.93 per cent), Jet Airways (down 4.74 per cent), SpiceJet (down 3.96 per cent) and IndiGo (down 2.16 per cent) plunged up to 5 per cent hit by a hike in jet fuel prices. As per a report in TOI, oil companies increased jet fuel prices by 7.3 per cent on Monday. A kilo-litre (1,000 litres) of aviation turbine fuel (ATF) will cost Rs 74,567 and Rs 74,177 in Delhi and Mumbai this month respectively, up from Rs 69,461 and 69,161 in September. Firming global crude oil prices is the main reason behind the price hike in Jet fuel by oil companies.
Auto stocks rose on Sept sales numbers
The countrys largest car maker Maruti Suzuki reported a marginal decline in total September sales at 1,62,290 units against 1,63,071 units sold in the year-ago period. Shares of the company closed at Rs 7,465.30 apiece, up 1.56 per cent, on BSE. Royal Enfield, the two-wheeler division of Eicher Motors, reported a 2 per cent growth in total sales at 71,662 units in September. Eicher Motors shares closed the day 2.79 per cent higher at Rs 24,838.70 on BSE.
Tata Motors reported a 20 per cent rise in domestic sales in September at 64,520 units compared with 53,964 units sold in the same month last year. The stock closed 2.60 per cent higher at Rs 229.25 on BSE. Shares of M&M fell 1.52 per cent to Rs 847.60 after the company said its tractor sales declined 18 per cent to 37,581 units in September. However, the company reported a 2 per cent rise in total sales at 55,022 units in September.
Bajaj Auto climbed 1.59 per cent to Rs 2,729.75 after the company reported 17 per cent increase in total sales to 5,02,009 units for September as against 4,28,752 units in the same month last year. Escorts reported a 2.5 per cent rise in tractor sales to 10,617 units in September and the stock closed 1.98 per cent higher at Rs 623.05 on BSE. Ashok Leyland reported 26 per cent rise in September sales at 19,373 units and the stock closed at Rs 119.85, with a gain of 0.67 per cent.
Over 650 stocks touched 52-week lows
As many as 676 stocks touched 52-week lows on NSE. However, many of them recovered later and settled with gains. Eicher Motors, Escorts, Hero MotoCorp, Maruti Suzuki India, Tata Motors, Asian Hotels (East), Allahabad Bank, Apollo Tyres, Arvind, Avanti Feeds, Bank of Baroda, Bandhan Bank, Ceat, Central Bank of India, Dilip Buildcon, Prataap Snacks, GIC Housing Finance and Indiabulls Real Estate featured among the stocks that touched 52-week lows before bouncing to log gains. On the other hand, only seven stocks – Monnet Ispat & Energy, Gangotri Textiles, Infosys, DSP Liquid ETF, Prakash Steelage, Ruchi Infrastructure and Spacenet Enterprises India – touched their 52-week highs on NSE.