Sensex, Nifty advance for 2nd day on pre-budget rally in banking stocks

Market benchmark index BSE Sensex rose by 227 points on Friday, extending gains for a second day after a rally in banking and cement stocks on hopes of a good budget and financial results. After opening on a weak note, the 30-share BSE index settled higher by 226.79 points or 0.55 per cent at 41,613.19. It hit an intra-day high of 41,697.03 and a low of 41,275.60.

The broader NSE Nifty closed 67.90 points, or 0.56 per cent, up at 12,248.25. Ultratech Cement was the top gainer in the Sensex pack, advancing 2.47 per cent after it posted 80 per cent jump in October-December net profit to Rs 712 crore. Banking stocks gained ahead of the Union budget for 2020-21. Axis Bank rose by 2.01 per cent, Kotak Bank by 1.98 per cent, ICICI Bank by 1.18 per cent while State Bank of India advanced 0.25 per cent.

HDFC rose by 1.02 per cent while Bajaj Finance gained 1.56 per cent. Larsen & Toubro gained 2.03 per cent, Titan by 1.91 per cent and HeroMotoCorp by 1.53 per cent. IT stocks Tech Mahindra and HCL Tech advanced 2.43 per cent and 1.57 per cent, respectively.

Vinod Nair, Head of Research, Geojit Financial Services said, "In anticipation of a good budget & Q3 result, the pre-budget rally has been solid. For this rally to maintain a lot will depend on the actual outcome of Budget & final Q3 earnings trajectory, market is turning a bit cautious before the big event."

Recovery in global markets after the World Health Organisation designated coronavirus infection an emergency for China, but not yet for the rest of the world, also buoyed benchmarks.

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Hemang Kapasi, Portfolio Manager - Equity Investment Products, Sanctum Wealth Management said, "Market is whole heartily rewarding the stocks with stellar earnings growth. Further, the sentiments are positive as the market is expecting measures like reduction in personal & capital gains tax in upcoming budget."

Among losers, PowerGrid fell the most by 2.14 per cent, followed by IndusInd Bank which dropped 1.21 per cent. Infosys also edged lower by 0.20 per cent after SEBI said it would seek a forensic audit of the books of Infosys amid whistle-blower allegations of alleged financial irregularities at the company. Sun Pharma, RIL, HDFC Bank, TCS and Maruti were among the losers.

Among sectoral indices, BSE capital goods, consumer durables, basic materials, metal, industrials, bankex and finance indices rallied up to 1.50 per cent, while energy and oil and gas indices ended in the red. Broader BSE midcap and smallcap indices jumped up to 0.77 per cent. During the week, Sensex shed 332.18 points or 0.79 per cent, and Nifty gave up 104.10 points or 0.84 per cent.

"It has been a consolidated week for heavyweights due to marginally lower than expected result for IT, Banks and Infra sector, while Mid & Small caps are continuing its positivity in expectation of revival in growth & liquidity from institutional investors," Nair commented.

Bourses in Hong Kong and Japan ended on a positive note, while markets in China, Taiwan and South Korea were closed for a holiday on Friday. European markets were also trading higher in their early sessions. Brent crude oil futures rose 0.15 per cent to USD 62.13 per barrel. The rupee depreciated by 5 paise to 71.31 per US dollar (intra-day).

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