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Banks, IT stocks lift Sensex 318 pts; Nifty above 10,500, midcaps underperform

The market managed to recover all its previous session’s losses on Thursday, led by short covering in beaten down stocks. Dovish Federal Reserve minutes, correction in crude oil prices and the recovery in rupee also aided sentiment.

Technology and banking & financial stocks were leading contributors to the market’s rally while the correction in Tata Motors and PSU oil & gas cap losses.

The 30-share BSE Sensex was up 318.20 points or 0.93 percent at 34,663.11 and the 50-share NSE Nifty rallied 83.50 points or 0.80 percent to 10,513.90.

“Today’s sharp rebound in Nifty was bit of surprise especially after the Wednesday’s fall and that caught bears completely off-guard. However, it’s too early to call this bounce as reversal and thus advise waiting for confirmation before jumping into a trade,” Jayant Manglik, President, Religare Broking said.

Private banks, IT and FMCG counters should be preferred for buying while further recovery in PSU banks and metal would attract fresh shorts, he advised.

Besides, the report stating considerable rise in direct tax collection in the last financial year further boosted investors’ sentiment. Net direct tax collection in the financial year 2017-18 rose 18 percent to Rs 10.03 lakh crore compared to previous year.

Software majors TCS and Infosys climbed 3 percent each, lifting the Nifty IT index 2.3 percent on favourable rupee movement. The Indian rupee recovered 8 paise to close at 68.34 against the US dollar today. It had fallen 42 paise to 68.42 a dollar in previous session.

“Rupee bounced from yesterday’s 18-month low as the Dollar lost its shine after FOMC minutes reflected a dovish stance. Equity indices’ bounce back from yesterday’s fall also boosted rupee’s demand, but the gains were limited with Brent refusing to retract much from the $80 mark,” Anand James, Chief Market Strategist at Geojit Financial Services said.

Among other sectoral indices, Nifty Bank, Financial Services, Metal, Pharma and PSU Bank gained 1-1.7 percent.

The Auto index corrected 1.65 percent due to sharp fall in Tata Motors, the biggest loser among Nifty50 stocks. The stock lost 6.7 percent as global brokerage houses CLSA, Jefferies and Morgan Stanley slashed their target prices by 10-16 percent after weak Q4 earnings.

ONGC share price plunged 11 percent intraday, but recovered some of losses to end down 4.4 percent amid fears of a windfall tax levy on oil producers. GAIL also lost 4 percent after March quarter earnings missed estimates, with profit falling 19 percent YoY.

Sun Pharma and Tech Mahindra gained 2 percent each ahead of quarterly earnings due tomorrow.

HDFC Bank, HDFC, ICICI Bank, Axis Bank, IOC, SBI, Bharti Airtel and Kotak Mahindra Bank rallied 1-4 percent while Grasim, Maruti Suzuki, Yes Bank, Bajaj Auto and HPCL ended down 1-2 percent.

The Nifty Midcap underperformed frontliners, falling 0.4 percent. About 916 shares declined against 800 advancing shares on the NSE.

NCC shares rallied 8.8 percent after Q4 profit grew 61 percent YoY and the company targeted 45 percent growth for topline in FY19.

Granules India and Jet Airways ended down 7 percent each following dismal performance in March quarter.

On the global front, crude oil prices fell on expectations that OPEC members will increase production following concerns over supply from Venezuela and Iran. Brent crude futures declined a percent to $79 a barrel.

Asian markets ended mixed amid caution over fresh trade-related developments between the US and China, with Japan’s Nikkei falling 1.11 percent while European markets were trading higher, with France’s CAC and Germany’s DAX up 0.5 percent and 0.2 percent, respectively.

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