Big banks pull their weight, markets take a leap
MUMBAI : Big banks led Monday's bull charge in stocks, adding the most in percentage terms to the Nifty and Sensex, after trailing their smaller peers in valuations over the past year. The surge lifted the Bank Nifty to a record, helping the Nifty clock a new high during the day. Four of Nifty's five top gainers were banks, fetching 70% of the Nifty’s 223.45-point gain to 22,643.40.
They also were the top five stocks on the Sensex, which rose 1.28% to 74671.28. Analysts expect the bellwether indices to outperform their small- and mid-cap counterparts, as large private sector banks close the valuation gap. The 12-stock Bank Nifty rose 1223 points, the most in five months, to close at 49424.05, near its record high.
During the day, it hit a record 49473.60, closing in on the psychological 50,000 mark. Financial sector stocks have the highest weight of 33.53% in Nifty. “Large-cap banks have put up a solid showing, which is likely to persist given their attractive valuations," said B.
Gopkumar, managing director & chief executive officer of Axis Mutual Fund. “This could give more legs to the rally toward the upper end of a rangebound market." The market is expected to move in a tight 600-point range of 22,200-22,800, said Jayesh Bhanushali, lead, research at IIFL Securities. He expects the Bank Nifty to test the 50500-mark in the sessions ahead.
While large-cap stocks rose, profit-taking was seen in the Nifty Midcap 150 and the Nifty Smallcap 250, which touched intraday highs of 18861.2 and 15929.50, before closing little changed. Overall, Indian companies’ market cap approached the $5 trillion mark, reaching $4.87 trillion after Monday’s rally. Indeed, valuations of large-cap banks have trailed their small-cap counterparts,
. Read more on livemint.com
