Bank stocks rallied, giving a solid base to the benchmark indices after the Q2FY21 results of HDFC Bank cheered investors.
The Sensex and the Nifty carried forward the previous session’s gains in the morning trade on October 19 as both indices jumped over a percent higher.
The Sensex rose more than 500 points and the Nifty touched 11,892 within the first hour of the trade. At 1035 hours, the Sensex was 449 points, or 1.12 percent, up at 40,432 while the Nifty was trading 117 points, or 1 percent, higher at 11,879.50. BSE Midcap and smallcap indices were 0.21 percent and 0.39 percent up, respectively.
Sectorally, BSE Bankex jumped over 2 percent and finance and energy climbed 2 percent.
Here are five factors that triggered the market rally:
Positive global cues
The Indian market rose in sync with most of the Asian peers. As per Reuters, Japanese shares gained more than 1 percent on October 19, tracking Wall Street futures higher in early Asian trade, on hopes of a new US coronavirus relief deal before the presidential election.
Also Read: Stock market; Gainers and Losers: 10 Stocks that moved the most on October 8
Bank stocks rally
Bank stocks rallied, giving a solid base to the benchmark indices after the Q2FY21 results of HDFC Bank cheered investors.
HDFC Bank, the country’s largest private sector lender, reported an 18.4 percent year-on-year growth in profit at Rs 7,513.11 crore for the September quarter, driven by PPoP, NII and lower tax rate. The profit in the year-ago period was at Rs 6,345 crore.
Encouraging reports on COVID-19 front
A government-appointed panel on October 18 said the COVID-19 pandemic had peaked in India and could be brought under control by early next year with “minimal active cases by February-end” if protective measures are followed.
According to reports, the ‘COVID-19 India National Supermodel’ committee, led by Professor M Vidyasagar of the Indian Institute of Technology (IIT) Hyderabad, revealed the findings in a study titled Progression of the COVID-19 pandemic in India: Prognosis and Lockdown Impacts. According to the study, the number of infections in the country by the time the epidemic ends would be 105 lakh. India has already reported more than 75 lakh cases.
Earnings on expected lines
The September quarter earnings have largely been on expected lines, so far, and have been better than the expectations in some cases as well.
The numbers of TCS, Infosys and HDFC Bank have been able to keep the market sentiment up.
China’s swift economic recovery
Media reports suggest that China’s economic recovery quickened in the third quarter even as overall growth missed the forecast.
As per Reuters, China’s economic recovery accelerated in the third quarter as consumers shook off their coronavirus caution, however, overall growth missed forecasts, pointing to persistent challenges for one of the world’s few current engines of demand.
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