Markets Break Week-Long Losing Streak, Rise Sharply on Strong Earnings Of Cos

India's stock indices, BSE Sensex and NSE NIFTY, ended a week-long losing streak, rising 1,100 points on strong corporate earnings, writes Krishnanand.

New Delhi:India’s two major stock market indices--BSE Sensex and NSE NIFTY--Monday broke a week-long losing streak, which was triggered by unprecedented selling by foreign portfolio investors this month. While BSE Sensex rose by 1,100 points and touched an intra-day high of 80,540 points, NIFTY also touched an intra-day high of 24,492, due to strong earnings by the companies, particularly banking companies, which was further strengthened by the hopes that oil prices will fall as Israel did not attack oil and nuclear energy installations in Iran, a major energy producer in the Middle East.

On Monday, BSE Sensex closed up by 603 points (0.76 per cent), and NIFTY closed the trading session in the green, up by 158 points (0.65 per cent).

It's a major relief for the investors as both the key indices have suffered major jolts during the previous week, which was fuelled by unprecedented selling by foreign portfolio investors who withdrew more than $10.2 billion (Rs 85,790 crore) from Indian markets in the last four weeks of this month. As a result, the BSE Sensex had declined from a high of 81,151 on October 21 to 79,402 on October 25 last Friday.

Turning the tide!

However, all the gloom of the past week seems to be going away with the start of the week as BSE Sensex once again claimed its above 80,000 level at the time of closing on Monday. NSE NIFTY also closed above 24,000 on Monday.

Only five out of the total 30 stocks in the 30-share sensitive index of BSE, closed the day’s trading in the red. Similarly, only 14 of the total 50 shares in more broad-based NSE NIFTY closed today’s trading in red.

Why are markets looking up?

Both the key stock indices--BSE and NSE--rallied as major players on both platforms showed strong second-quarter (July-September 2024) results. The sentiments further turned positive as Israel’s retaliatory strikes against its arch-rival Iran spared its critical energy infrastructure and was only targeted at the country’s military installations with limited impact.

It gave the message that energy supplies will not be disrupted despite a protracted war in the Middle-Eastern region and as a result, oil prices will fall.

Banking stocks shine

The index heavyweights that pushed the BSE Sensex up on Monday included banking sector companies such as ICICI Bank contributing 270 points.

The main reason behind the rise of ICICI Bank was its strong corporate earnings in the second quarter as its net profit rose by over 14 per cent (Rs 11,746 crores) during the July-September period.

ICICI Bank was also the top gainer on the BSE Sensex, closing the day with a 3 per cent gain. Adani Ports, JSW Steel, Tata Steel, Mahindra & Mahindra and Sun Pharma also closed the day up by more than 2 per cent.

On the other hand, other big companies such as Hindustan Unilever, Tata Motors, SBI, Asian Paint, Bajaj Finserv, NTPC, IndusInd Bank and HCL Tech were up by more than one per cent at the close of trading on Monday.

ICICI Bank received a share price target upgrade from brokerages after the bank posted better-than-average results for the second quarter of FY 2024-25.

In terms of sector-wise performance of stocks, all sectors were trading in green. For example, BSE BANKEX, BSE SENSEX 50, BSE 100 and BSE Bharat 22 Index all closed the day in green.

Similarly, all key sectors in the NSE NIFTY also closed the day in the green. While Nifty PSU Bank surged by 3.06 per cent intraday, but at the time of the close of the trading session it was up by 0.93 per cent.

NIFTY NEXT 50 was up by 0.45 per cent, NIFTY MIDCAP SELECT (0.64 per cent), and NIFTY FINANCIAL SERVICES (0.54 PERCENT) at the time of the close of the trading session on Monday.

PSU Bank Stocks such as shares of the Bank of Baroda, Punjab National Bank, Canara Bank, SBI, Central Bank, Union Bank, and Bank of India rose in the range of 2-6 per cent each during the intraday trading on Monday.

Global markets

The rally witnessed in Indian stocks was also supported by a strong show in other Asian markets. Japan’s benchmark Nikkei 225 and Topix index rose on Monday after the ruling Liberal Democratic Party lost its majority in the lower house.

Japan’s opposition parties, including the Constitutional Democratic Party and the Democratic Party for the People, made significant gains.

As a result of this major development in Japan’s politics, the Nikkei climbed 1.97 per cent, while the Topix increased by 1.58 per cent.

On the other hand, South Korea’s Kospi gained 0.97 per cent, and the Kosdaq rose 1.75 per cent on Monday while Australia’s S&P/ASX 200 started the day in green which helped other Asian markets to rally. S&P/ASX 200 closed Monday’s trading in the green, up by 0.12 per cent.