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Published on 28/05/2020 4:15:25 PM | Source: Reuters

Sensex, Nifty surge as financials gain for second straight day

Posted in Stock Market| #Sensex #Stock Market #NSE #BSE #Nifty

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By Sethuraman N R

BENGALURU  - Indian stocks ended nearly 2% higher on Thursday as investors bought beaten-down banking stocks for a second day, while auto and metals gained on broader market optimism.

The NSE Nifty 50 index ended up 1.88% at 9,490.10, while the S&P BSE Sensex gained 1.88% to 32,200.59. Both the indexes had risen over 3% on Wednesday.

The Nifty banking index, which has fallen over 40% so far this year, ended up 2.5% on Thursday, following a 7% surge in the previous session.

"Because of the global liquidity, foreign institutional selling has reduced in the Indian market. Also, the financial stocks were heavily beaten down and markets had under performed compared to global peers," said Neeraj Dewan, director at Quantum Securities in New Delhi.

"We will get these up moves in the market, but they might not sustain as there is still a long way to recovery and it will take time for the demand to come back," Dewan added.

India may need to inject up to 1.5 trillion rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic, three government and banking sources told Reuters.

HDFC Bank Ltd and Housing Development Finance Corp Ltd ended up 4.6% and 3.4%, respectively and were the top boosts to the Nifty 50 index.

Institutional buying in domestic private banks also forced investors to cover their short positions leading to the surge, analysts said.

Nifty sub indexes auto and metals rose 3.65% and 2.4%, respectively. Zee Entertainment Enterprises Ltd ended up 9.9% and was the top gainer in the bluechip Nifty 50 index.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Maju Samuel)