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Market at record close, Nifty above 10,800 for first time; midcaps, metals underperform

Benchmark indices finished the day at fresh record closing highs despite late volatility on Thursday but the broader markets underperformed by a huge margin.

Private banks were pushing the market towards record closing high after sources told CNBC-TV18 that the government may be considering allowing 100 percent FDI in banking sector but PSU banks wiped out gains in the last hour of trade.

Index heavyweights HDFC and ITC also led the market higher but selling pressure in oil & gas, metals, telecom and select auto stocks capped gains.

The 30-share BSE Sensex surged 425.54 points to hit all-time high of 35,507.36 intraday, before closing up 178.47 points at 35,260.29.

The 50-share NSE Nifty gained 28.50 points at 10,817 at close whereas the Nifty Midcap and BSE Smallcap indices lost 2 percent each. About six shares declined for every share rising on the NSE.

“We continue to hold a wait and watch outlook and believe the markets are overbought and in the expensive category at this juncture, we would not initiate fresh longs at this time,” Nikhil Kamath, Co-Founder and Head of Trading, Zerodha said.

Meanwhile, the government is thinking of allowing 100 percent foreign direct investment in private banks. Increasing the permissible limit for FDI in public sector banks to 49 percent from the current 20 percent is also being considered, sources told CNBC-TV18. The proposed changes are reportedly being discussed by the Finance Ministry, the Department of Industrial Policy and Promotion (DIPP) and the Indian Banks’ Association (IBA).

Nifty Bank ended at fresh record closing high, rising nearly a percent, driven by private banks. HDFC Bank, IndusInd Bank, ICICI Bank and Kotak Mahindra Bank gained 1-2 percent while PNB, SBI, IDFC Bank, Bank of Baroda and Canara Bank were down 1-4 percent.

Yes Bank wiped out all gains to close 0.35 percent lower after its Q3 earnings were announced. Profit grew by 22 percent and asset quality also improved but net interest income missed expectations and net interest margin contracted 20 basis points sequentially.

Nifty Metal was the biggest loser among sectoral indices, falling 3 percent; followed by Pharma (1.2 percent) and PSU Bank (1.6 percent) while FMCG gained 1 percent.

Bharti Infratel, Adani Ports and UltraTech Cement were down 3-6 percent after third quarter earnings. Bharti Airtel fell 1 percent ahead of numbers later today.

Vedanta, IOC, Bajaj Finance, Tata Steel, Tata Motors, HPCL, Hindalco, HUL and BPCL among others were down 1-3 percent whereas ITC rose 2.76 percent ahead of earnings tomorrow.

Mindtree rallied 10 percent after stellar Q3 earnings performance. Morgan Stanley upgraded the stock to overweight on improving macro & execution, and raised target price by 33 percent.

On the global front, Asian markets closed mixed with China’s Shanghai Composite rising 0.9 percent and Japan’s Nikkei falling 0.4 percent. European stocks were mixed at the time of writing this article.

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