 "Reliance Industries, financials contribute 50% of over 1,000 points Sensex rally in seven days")
Reliance Industries (RIL) along with three financial companies – Housing Development Finance Corporation (HDFC), ICICI Bank and HDFC Bank have contributed more than 50% of the 1,000 points Sensex rally in past seven trading sessions.
The Bombay Stock Exchange (BSE) S&P BSE Sensex has gained 1,083 points or 4.1% from 26,371 on June 11 to 27,453 today at 0950 hours.
These four companies have contributed 573 points or 53% of the total index gain. These stocks have a combined weightage of 30% in the 30-share Sensex.
The National Stock Exchange (NSE) CNX Nifty up 327 points or 4% at 8,291 points during the same period. The current rally is attributed to better than expected monsoon, CPI (consumer price index) numbers and increase in MSP (minimum support price).
"India is rolling ahead with further sustenance in Global market and underperformance in China. Increase in global risk and China’s outperformance where amongst the important reason for our past underperformance. To continue this sustenance in India, we need to see better government spending and lower interest rate," said Vinod Nair, head of fundamental research, Geojit BNP Paribas Financial Services.
RIL, the largest contributor among the index, contributed 213 points of the total benchmark index gain during the period. The stock hit its highest level since December 2014 and rallied 15% from Rs 877 on June 11 to Rs 1,009 during intra-day trade today, after most of the analysts have either upgraded their recommendation or have changed their price target of the stock post Annual General Meeting (AGM).
As many as 38 analysts recommended ‘buy’ rating and eight have ‘hold’ rating on the RIL with an average target price of Rs 1,055, shows Bloomberg data.
The Bombay Stock Exchange (BSE) S&P BSE Sensex has gained 1,083 points or 4.1% from 26,371 on June 11 to 27,453 today at 0950 hours.
These four companies have contributed 573 points or 53% of the total index gain. These stocks have a combined weightage of 30% in the 30-share Sensex.
The National Stock Exchange (NSE) CNX Nifty up 327 points or 4% at 8,291 points during the same period. The current rally is attributed to better than expected monsoon, CPI (consumer price index) numbers and increase in MSP (minimum support price).
"India is rolling ahead with further sustenance in Global market and underperformance in China. Increase in global risk and China’s outperformance where amongst the important reason for our past underperformance. To continue this sustenance in India, we need to see better government spending and lower interest rate," said Vinod Nair, head of fundamental research, Geojit BNP Paribas Financial Services.
RIL, the largest contributor among the index, contributed 213 points of the total benchmark index gain during the period. The stock hit its highest level since December 2014 and rallied 15% from Rs 877 on June 11 to Rs 1,009 during intra-day trade today, after most of the analysts have either upgraded their recommendation or have changed their price target of the stock post Annual General Meeting (AGM).
As many as 38 analysts recommended ‘buy’ rating and eight have ‘hold’ rating on the RIL with an average target price of Rs 1,055, shows Bloomberg data.
“Private sector banks on the other hand, are default beneficiaries. On one side we have public sector banks that are saddled with non-performing assets. On the other hand, there will be increased competition in the telecom space with Reliance Jio’s entry. This will give some more pain to the PSU banks for the telecom exposure that they have. As a result, investors are allocating more to the private banks compared to their PSU counterparts. We hold a positive view on the private sector banks,” he adds.
Three financials - HDFC (137 points), ICICI Bank (130 points) and HDFC Bank (93 points) have collectively contributed 360 points of the total Sensex gain. These stocks gained between 4%-7% during the period. Bank Nifty was up nearly 2% or 290 points at 18,171, compared to 0.84% rise in the CNX Nifty. The NSE banking share index has rallied 5% since June 11, 2015.
In the recently concluded quarter, while banking as a sector had come under pressure, the private sector banks which we have been recommending had had a relatively better period and have out-performed, said R Sreesankar, head of institutional equities at Prabhudas Lilladher.
“We continue to believe that structurally, it is the private sector banks which will give a sustained out performance and at best most of the PSU banks will be trading play. Our preferred picks continue to be HDFC Bank, YES Bank, ICICI Bank,” he adds.
Meanwhile, Mahindra & Mahindra (69 points), ITC (64 points), Sun Pharmaceutical Industries (45 points), Larsen & Toubro (40 points) and Maruti Suzuki India have contributed more than 40 points each in total Sensex gain.