Mumbai: Market found its winning ways as Sensex rose over 265 points and Nifty reclaimed the key 8,500-level on emergence of rally in bank stocks in anticipation of rise in deposits after 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 percent 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 Services 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 demonetization."
Hectic short-covering and value-buying were the order of day, besides the market was well supported by quarterly earnings of key corporates.
Buying was led by metal, banking, telecom, utilities, power and financial sectors, helped by second-line shares of midcap and smallcap companies.
While, IT, auto and consumer durable segments saw a selling pressure.
The 30-share Sensex opened gap-up at 26,605.05 and hovered between 27,743.46 and 27,457.05 before concluding at at 27,517.68, showing a gain of 265.15 points, or 0.97 percent. The gauge had dropped 338.61 points yesterday.
The Nifty also gained 93.75 points, or 1.11 percent, to end at 8,525.75, after trading between 8,598.45 and 8,510.70.
Meanwhile, Foreign portfolio investors (FPIs) sold shares worth Rs 2,095 crore yesterday, as per provisional data.
Overseas, Asian markets ended higher to join a global rebound on speculation that Donald Trump will pursue business- friendly policies.
European shares also advanced led by miners and banks amid encouraging results from companies such as Vivendi supporting the broader market.
In domestic markets, financial stocks emerged top performers as investors indulged in raising their bets.
Stocks such as Bank of India, PNB, Bank of Baroda, SBI, Canara Bank, Yes Bank, Federal Bank ICICI Bank, Axis Bank and HDFC Bank were the big movers of the day by surging up to 13.71 percent, lifting the NSE Nifty bank by 3.49 percent.
Among other gainers were Cipla 6.85 percent, Coal India 4.91 percent, Power Grid 4.38 percent, ICICI Bank 3.91 percent, Axis Bank 3.85 percent, Adani Ports 3.63 percent, Bharti Airtel 2.38 percent and ONGC 2.22 percent.
The BSE midcap index provisionally rose 1.65 percent. The BSE smallcap index provisionally rose 1.75 percent. Both these indices outperformed the Sensex.
Of the 30-share Sensex pack, 18 scrips ended higher.
Metal shares were in demand as copper price edged higher in the global commodities markets. Tata Steel was up by 9.27 percent.
Among the laggards were Asian Paints 3.50 percent followed by Hero Motoco 2.82 percent, Lupin 2.34 percent, HDFC 2.28 percent, Infosys 1.80 percent, Bajaj Auto 1.66 percent and Maruti 1.33 percent.
Among BSE sectoral and industry indices, metal rose 6.04 percent, followed by bankex 3.63 percent, telecom 3.36 percent, utilities 2.78 percent, power 2.69 percent, finance 2.37 percent, realty 1.99 percent and capital goods 1.77 percent. While IT fell by 0.72 percent, auto 0.71 percent and consumer durables 0.07 percent.
The market breadth turned positive as 2,029 shares ended higher, 721 closed lower, while 132 ruled steady.
The total turnover on BSE amounted to Rs 3,737.42 crore, lower than turnover of Rs 5,465.90 crore registered during the previous trading session.
(With agency inputs)