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Informist, Friday, Dec. 13, 2024

By Anjana Therese Antony

MUMBAI – Gains in banking and telecom stocks pushed the market into the green in the second half of the session Friday. Shares of most banks, which fell in the first half due to bearish views from global broking firm UBS, recovered later and closed higher, with index heavyweights HDFC Bank and ICICI Bank leading the rise. These two banks are also UBS's preferred picks in the sector.

Shares of HDFC Bank and ICICI Bank together contributed to a 0.2% rise in the Nifty 50, which closed 0.9% higher. The two banking stocks have the highest weightage in the 50-stock index, with a combined 21.04%. The falling gap between credit and deposits and comfortable valuations in some pockets of private banks are expected to leave more room for an upside, analysts said. Analysts are optimistic about better liquidity in the banking system, especially once the reduction in cash reserve ratio by the Reserve Bank of India kicks in.

The Nifty 50 and BSE Sensex, which fell around 1.5% each intraday from the previous close, recovered and closed around 1% higher each. The 50-stock index closed 0.9% higher at 24768.30 points and the 30-stock index ended 1% higher at 82133.12 points. Both indices rose around 2.5% from the day's lows. Near-term support for the Nifty 50 is pegged at 24600-24500 points and resistance at 24800-24870 points, a technical and derivatives analyst at a domestic broking firm said.

Analysts do not expect any sharp rise or fall in the Nifty 50 next week in the absence of major triggers in the domestic and global markets. The US Federal Reserve's monetary policy outcome will be in focus, where the apex bank is widely expected to cut the Federal fund rate by 25 basis points to 4.25-4.50%. Fed Chair Jerome Powell's comments on inflation and the future rate trajectory will also be closely watched.

Foreign investors have turned net sellers in the last two sessions after turning buyers recently. On Thursday, foreign institutional investors net sold shares worth INR 35.60 billion. They had sold sharply in the domestic market in October and November amid a weak near-term outlook for India. The sharp slowdown in economic growth and higher inflation had also deepened worries about domestic interest rate cuts being delayed further.

Telecom stocks surged, with Bharti Airtel gaining the most. The stock has a 4.03% weightage in the Nifty 50 and closed 4.4% higher to become the top gainer in the index. The stock rocketed after Jefferies named it as one of the top picks for 2025. Reports said Jefferies expects the stock to test INR 1,920 by the end of 2025, which is 14% higher than Friday's closing level of INR 1,681.75. Reliance Industries snapped a five-day losing run and closed 0.7% higher at INR 1,272.85.

Metal stocks were the sectoral laggards after reports that the government may impose a 25% safeguard duty on steel imports, which some analysts said is lower than what they had expected. Steel players in India have been raising concerns about cheap imports of steel from countries such as China. JSW Steel and Tata Steel were among the few stocks that closed lower in the Nifty 50. The Nifty Metal index ended 0.7% down, snapping a six-day winning streak.

Among specific stocks, CRISIL closed over 5% higher after the company said its board approved investing INR 332.50 million in Online PSB Loans to acquire a 4.08% stake. The stock hit its record high of INR 5,896.75 during the day.

* Of the Nifty 50 stocks, 42 rose and 8 fell

* Of the Sensex stocks, 27 rose and 3 fell

* On the NSE, 1,222 stocks rose, 1,572 fell, and 77 were unchanged

* On the BSE, 1,818 stocks rose, 2,173 fell, and 114 were unchanged

* Nifty FMCG: up 1.29%; Nifty Private Bank: up 0.8%; Nifty Metal: down 0.72%

BSE                                               NSE

Sensex: 82133.12, up 843.16 points or 1.04%       Nifty 50: 24768.30, up 219.60 points or 0.89%        

End

Edited by Rajeev Pai

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