By Bharath Rajeswaran and Hritam Mukherjee
(Reuters) -India’s benchmark Nifty 50 posted its best day in three weeks on Monday and snapped a five-session losing streak as upbeat results from ICICI Bank and other lenders powered gains in banking stocks.
The NSE Nifty 50 jumped 0.65% to end at 24,339.15, while the narrower BSE Sensex rose 0.76% to close at 80,005.04.
The Nifty has lost 2.24% in the past five sessions, taking its decline to 7.4% since its record high on Sept. 27, roughly four weeks back. That was mainly due to sustained foreign selling and a slew of largely lacklustre earnings reports.
“There is no surprise over the resumption of buying interest as the recent drop has made several segments of the market, especially financials, attractive buying opportunities due to their relative valuation comfort,” said Lakshmi Iyer, chief executive of Kotak Alternate Asset Managers.
All 13 major sectors advanced, while the small- and mid-caps gained 1.2% and 0.8%, respectively.
Private lender ICICI Bank, the third-heaviest Nifty stock, rose 3% after its results showed better asset quality than peers, analysts said.
That helped lift banks and financials by 0.9% and 0.5%, respectively.
The biggest jump was in public sector banks which rose 3.8%, led by a post-results rally in Bank of Baroda and Punjab National Bank.
Nifty components Shriram Finance rose 5.4% after reporting a bigger quarterly profit, while Sun Pharma advanced 2.3% after its quarterly profit beat analysts’ estimates.
Foreign investors have pulled out $10.57 billion from Indian stocks so far this month, on course for record monthly outflows, with a view to invest in China as it rolls out stimulus plans.
But Iyer said that would likely not last long.
“The ‘buy China, sell India’ trade, which led to sustained foreign outflows and put pressure on the markets over last 20 sessions is more of a tactical, short-term phenomenon and not a worrisome factor.”
(Reporting by Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips, Janane Venkatraman, Sumana Nandy and Savio D’Souza)
