Banks, financial stocks help Sensex, Nifty rise over 3%, check what propelled the rally on D-Street

Axis Bank was the top Sensex gainer, ending the session with a growth of 13.46 per cent. While Sun Pharma was the top Sensex laggard, after reporting Q4 earnings which were below expectations

BSE Sensex and Nifty 50 staged a smart recovery in Wednesday’s session and settled over 3 per cent higher aided by buying in financial and bank stocks ahead of tomorrow’s F&O expiry. Sensex zoomed nearly 1,000 points or 3.25 per cent to end at 31,605.22, while the broader Nifty 50 index reclaimed its crucial 9,300-mark to finish at 9,314. HDFC Bank, ICICI Bank, HDFC, Axis Bank and Infosys were among the top contributors to today’s Sensex up move. Axis Bank was the top Sensex gainer, ending the session with a growth of 13.46 per cent. While Sun Pharma was the top Sensex laggard, after reporting Q4 earnings which were below expectations. Nifty Bank index surged 7.28 per cent led by gains in Axis Bank, ICICI Bank, Bandhan Bank and RBL Bank.

Check what fuelled today’s rally-

Financial stocks were major index gainers in today’s session. “Financials lead the charge, spearheaded by the likes of Axis Bank, ICICI Bank & the HDFC Twins, with 7 out of 10 financial stocks clocking in the highest gains today. Further, positive global cues, indications of relaxation curbs and hopes of early discovery of the COVID-19 vaccine, also provided support to the market. Lastly, ahead of the monthly expiry, market is expected to be volatile and it appears that short squeeze is also at play due to this unexpected but very much welcomed rally,” said Aamar Deo Singh, Head Advisory, Angel Broking Ltd

In spite of rising number of infections, markets staged an intraday rally in sync with global cues. “Indian market was underperforming as compared to the rest of the world due to lack of stimulus for corporates and extension of stringent lockdown. During this, banks were the highest hit due to lack of economic activity, negative credit growth and degrade in asset quality. But easy and big fundraising announced by banks has changed the feeble view, confirming that banks will be able to overcome the situation as economy re-opens,” said Vinod Nair, Head of Research at Geojit Financial Services

Indian share market mirrored the positive global cues which were further propelled by European markets in the afternoon. “Markets are helped with the overnight rally in US markets which rose due to optimism on getting a vaccine introduced for COVID-19 soon, and later by strong European markets in the afternoon due to expectations of a stimulus plan from the EU. On the domestic front, Banks are pushing the markets higher led by gains ICICI Bank, Axis Bank and Bandhan Bank. We saw a bit of short-covering coming in once Nifty crossed 9,200 levels as the bulls came out stronger before expiry tomorrow,” Amit Gupta, Cofounder Tradingbells.