Global rebound, banking stocks power Sensex rally

Indian equity markets found their winning ways on Thursday as the Sensex rose over 265 points and the Nifty reclaimed the key 8,500-level on the emergence of a rally in bank stocks in anticipation of rise in deposits after the withdrawal of high value notes and investors coming to terms with US poll result.

The trading momentum in domestic markets accelerated tracking the overnight recovery in the US market and later on the Asian bourses.

Global investors are believed to have consoled themselves by factoring in Donald Trump’s pro-business policies, also resonating in domestic market trading momentum.

On domestic bourses, bank stocks rose sharply by up to 12 per cent after the government’s move to withdraw 500 and 1,000 rupee notes from circulation as part of black money crack down.

Vinod Nair, head of research, Geojit BNP Paribas Financial Serv-ices Ltd, said, “The surprising US election outcome has come as a one-time obstacle as the ‘BREXIT’ referendum... The market moved ahead keeping aside the notional excitement. Some caution can be expected in the near-term. Midcaps and banks can continue to rally since prices are still cheaper and benefit from demonetisation.”

Hectic short-covering and value-buying were the order of day, besides the market was well supported by quarterly earnings of key corporates.