Sensex rises for 2nd day; banks rally on RBI breather

Indian equities after trading range-bound for a better part of today's session finally ended higher, with banking shares leading the way after the RBI allowed lenders to spread provisions for bond losses over the next four quarters.

Both benchmark indices Sensex and Nifty managed to close higher for the second straight session following a fag-end rush for buying stocks.

The 30-share Sensex ended with a gain of 115.27 points and the broader Nifty closed 33.20 points higher.

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Besides banks, auto, PSU and power stocks led the rally on bourses, despite weak global cues.

Banking shares gained after the Reserve Bank allowed lenders to spread provisions for bond losses in the third and fourth quarters of the previous fiscal over the next four quarters.

Also, the appreciating rupee against the US dollar supported the market uptrend.

"Market traded range-bound throughout the day due to volatility in the global market. But towards the close, pace picked up supported by moderation in yield and growth in core sector. Yield declined amid central bank allowing the banks to spread their bond trading losses which gave a positive sentiment to banking stocks...," Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.

Investors are gradually shifting focus to upcoming Q4 results and RBI policy outcome which will dictate the market outlook in the near term, he added.

The Sensex today resumed lower and slipped further to hit a low of 33,153.83 on a bearish trend in other Asian markets, tracking overnight losses at the Wall Street on weakness in technology shares and trade tension between the US and China.

Later towards the fag-end, it staged a comeback to recover losses to scale a day's high of 33,402.94, before settling 115.27 points, or 0.35 per cent, higher at 33,370.63.

The gauge had gained 286.68 points in the first session of the new fiscal yesterday.

The 50-share Nifty after moving between 10,171.05 and 10,255.35 on alternate bouts of selling and buying, concluded 33.20 points, or 0.33 per cent, higher at 10,245.

Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 413.16 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 689.75 crore yesterday, provisional data released by the stock exchanges showed.

Shares of Bank of India rose 3.11 per cent, followed by Syndicate Bank 2.75 per cent, Bank of Baroda 2.29 per cent, Indian Bank 2.44 per cent, UCO Bank 1.60 per cent, State Bank of India 1.60 per cent and Bank of Maharashtra 1.82 per cent on the BSE.

Other gainers were Power Grid 1.93 per cent, Bharti Airtel 1.83 per cent, Tata Motors 1.34 per cent, Reliance Industries 0.68 per cent, Asian Paints 0.64 per cent and Sun Pharma 0.48 per cent.

Other banks like Yes Bank, IndusInd Bank, Axis Bank and Kotak Bank also ended in the positive zone, rising by up to 2.11 per cent.

Among the losers were: Wipro 2.02 per cent, ONGC 1.28 per cent, Adani Ports 0.86 per cent, HDFC Bank 0.74 per cent, Bajaj Auto 0.60 per cent, NTPC 0.47 per cent and L&T 0.46 per cent on profit-booking.

In the BSE sectoral pool, power index stayed on top, up 1.57 per cent, followed by infrastructure by 1.17 per cent, PSU by 1.11 per cent, bankex by 1.08 per cent, auto by 0.85 per cent, healthcare by 0.67 per cent, oil and gas 0.62 per cent, metal 0.49 per cent and realty 0.48 per cent.

Broader markets beat the benchmarks, with the small-cap index firming up 1.35 per cent and mid-cap 0.92 per cent.

In Asia, Japan's Nikkei was down 0.45 per cent and Shanghai's Composite Index shed 0.84 per cent, while Hong Kong's Hang Seng gained 0.29 per cent.

In the euro zone, Frankfurt's DAX fell 1.41 per cent, while Paris CAC shed 0.85 per cent in early deals. London's FTSE down 0.72 per cent.