Sensex, Nifty end at record closing highs; bank shares rally

The markets scaled fresh all-time highs led by a strong rally in banking shares following Kotak Mahindra Bank’s acquisition of ING Vysya. Further, strength in the global markets lifted the sentiments of the market participants.

 

Investors will watch out for Monday as the parliament convenes its winter session in which the government is confident of passing legislation to allow more foreign investment in the insurance industry.

 

The 30-share Sensex surged 267 points to end at 28,335 and the 50-share Nifty gained 75 points  to close at 8,477.

 

Earlier, the Sensex touched the life-time high level of 28,360.66 and Nifty reached all-time high mark of 8,489.80.

 

In the broader market, BSE midcap and BSE smallcap indices underperformed the larger counterparts and ended flat with a negative bias.

 

Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 477.15 crore on Thursday, as per provisional stock exchange data.

 

The rupee is trading at 61.8775/8800 vs Thursday's close of 61.94/95. Record high local stocks boosted sentiment for the rupee.

 

Sectors & Buzzing Stocks:

 

On the sectoral front, BSE Bankex was the top gainer with more than 2.3% of gains followed by BSE Consumer Durables, Capital Goods and Oil & Gas indices which gained between 1-1.5%. However, BSE IT and Healthcare indices lost sheen and were down between 0.3-1%.

 

Banking shares public as well as private sectors were in demand leading to gains of up to 4% after the Kotak Mahindra Bank announced that it was acquiring ING Vysya Bank in an all-stock deal.

 

Kotak Mahindra Bank, South Indian Bank, Karnataka Bank, Dhanlaxmi Bank, Lakshmi Vilas Bank and City Union Bank, Yes Bank, Axis Bank, ICICI Bank and ING Vysya Bank, State Bank of India (SBI), Oriental Bank of Commerce, Bank of Baroda, Andhra Bank and Bank of India gained 1-4%

 

Shares of ICICI Bank ended higher by 2.6% after the bank fixed December 5 as the record date for its proposed stock split.

 

Meanwhile, State Bank of India (SBI) today reclaimed its position as the country's most valued bank with a total market valuation of over Rs 2.25 lakh crore, surpassing private sector player HDFC Bank.

 

Shares of Yes Bank ended 4% higher after the Reserve Bank of India (RBI) said foreign institutional investors (FIIs) can buy equity shares in private lender as shareholding by foreign investors has gone below the prescribed limit.

 

From the auto space Tata Motors and Hero Motocorp closed 1% higher each. Tata Motors is aiming to increase its commercial vehicles exports by 300% in the next 4 years, according to media reports.

 

Cipla extended gains from yesterday and ended 1.4% higher on receiving a rating upgrade from Bank of America –Merrill Lynch. The pharma company's Europe subsidiary Cipla Europe NV has signed a distribution agreement with Serum Insititute of India to market latter's vaccines in the Euopean market. Further, Barclays raised the price target to Rs 639  from Rs 584; rating equal weight.

 

From oil & gas space, GAIL and Reliance gained 0.1% and 2% each. Meanwhile, oil prices rose in Asia today on fresh hopes that the OPEC cartel will overcome internal resistance to trim output.

 

Metal pack ended firm in today’s trade. Hindalco and Sesa Sterlite closed 2.6% and 1% higher. Coal India ended with marginal gains. The central government, after allowing commercial mining in the coal sector, is now planning to permit companies to sell mines of all minerals, except atomic ones, by providing transferability under the mining law. Under the law in force at present, a company cannot sell mines it holds to other companies, though leases are transferred whenever a mining company is taken over.

 

IT shares ended under pressure in today’s trade.Infosys lost 2%. According to media reports, Infosys has denied the possibility of an audit of its back office divisions spread across 13 countries as was expected by analysts after its facility in Czech Republic overbilled Apple Inc.

 

The company is likely to incur costs around Rs 6 crore due to the financial irregularities in the accounts of its business process outsourcing (BPO) arm, which led to the dismissal of the unit's chief financial officer, Abraham Mathews earlier this week.

 

Among other shares,shares of Financial Technologies (India) ended 2.2% higher after board of directors of the Company at its meeting held on 20 November 2014 approved appointment of Prashant Desai, President as MD & CEO of the Company.

 

Shares of Titagarh Wagons, Texmaco Rail Engineers and Cimmco rallied by up to 10% on reports that the government has released its first order for railway wagons.

Market breadth on the BSE ended weak with 1,376 advances and 1,636 declines.

 

Global Markets:

 

Japanese shares edged up after PM Shinzo Abe dissolved parliament's lower house in preparation for an election in which he will seek a fresh mandate for his struggling economic revival strategy. Nikkei gained around 0.3%.

 

Meanwhile, Chinese shares too gained as pressure of profit-booking eased and fresh buying was seen in casino stocks. Hang Seng ended  0.7% up while Shanghai Composite index surged 1.4%.

 

European markets are trading firm on strong economic data from US. However, lingering concerns about economic recovery in Europe are likely to weigh on sentiments. FTSE 100 and CAC 40 have gained between 0.5-1% and DAX is up 1.3%.