Indian stocks rose, with the benchmark Sensitive Index snapping a three-day, 3.8 per cent decline. Financial companies gained after Goldman Sachs raised its ratings of State Bank of India (SBI) and other lenders.
SBI, the nation’s biggest lender, gained 4.4 per cent. Indian Overseas Bank jumped 4.6 per cent and Punjab National Bank advanced 3.2 per cent. Goldman Sachs said the lenders would benefit from a rebound in the economy.
“Indian economy and the financial sector are returning back to a potential growth path, post a period of adjustment to the intense dislocation in the global economic environment,” analysts led by Sampath S K Kumar at Goldman Sachs said in a note to clients today.
Reliance fell for a second day, losing 1.6 per cent to Rs 2,143.35. Reliance’s price estimate was cut 5.7 per cent to Rs 1,650. The court yesterday ordered the fuels explorer to sell natural gas at 44 per cent less than the government-set price.
“We are seeing a rotation in sectors with investors now moving out of the commodity space and into areas such as financial services again,”
Momentum counters continue to attract market attention and pile up open interest positions. This suggests that intense speculative interest is creeping into the market. Contracts such as RNRL, Suzlon, Reliance Capital, IFCI, Unitech and Reliance Power have been witnessing higher activity. Among them, Suzlon added 1.01 crore shares in open interest, while IFCI added 1.06 lakh shares. Both these counters ended on strong note.
Today’s trading also saw most counters ending in premium, indicating that most of the accumulations were on the long side.
Overall we advice members to be cautious and take longs with near stop loss.
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