Mumbai: Bouncing back towards the fag-end of the session in an otherwise choppy trade, BSE Sensex on Monday closed nearly 34 points higher at 26,350.17 with gains in realty, power, FMCG and oil & gas stocks amid sustained buying by domestic institutional investors. However, banking shares led by state-run State Bank of India (SBI) were under pressure after the Reserve Bank on Saturday introduced an incremental cash reserve ratio (CRR) of 100% for the fortnight to absorb the surge in liquidity in banking system following demonetisation of high value notes. Besides, sentiment took a hit amid investors taking a cautious approach in view of persistent capital outflows from emerging markets including India by foreign funds after Donald Trump won the United States (US) election combined with weakness in the rupee.
Trading was also influenced after the Reserve Bank on Saturday asked banks to maintain a temporary incremental cash reserve ratio (CRR) of 100% to absorb excess liquidity from the system after the government’s move to withdraw high-value currency notes fuelled a surge in deposits, triggering sell-off in banking stocks.
The 30-share Sensex after a lower opening at 26,303.52, slipped further to touch a low of 26,183.22 as selling in banking stocks intensified. However, on emergence of widespread buying, it bounced back to wipe out early losses and hit a high of 26,413.99, before setting 33.83 points, or 0.13%, higher at 26,350.17. The gauge had rallied 456.17 points in the previous session on Friday after investors built-up fresh long positions in the new December series in the derivatives segment and rupee rebounding from record lows. Also, the NSE Nifty ended 12.60 points, or 0.16 %, higher at 8,126.90 after moving in a range of 8,066.50 to 8,146.50.
Foreign portfolio investors (FPIs) sold shares worth a net Rs372.80 crore on Friday, as per provisional data. Of the 30-share Sensex, 17 ended higher gaining as much as 5.53%. Bharti Airtel stayed in the lead among Sensex constituents and climbed 5.53 %, followed by Adani Ports (2.60%), ITC (2.08%), ONGC (2.07%), Hero MotoCorp (2.05%), NTPC (1.77%), Power Grid (1.41%), Cipla (1.28%), Bajaj Auto (1.17%) and Hind Unilever (0.51%).
In the banking segment, shares of state-run SBI plunged 2.82% , ICICI Bank lost 1.73% and HDFC Bank fell 0.32%. Globally, China’s Shanghai Composite closed 0.46% up, while Hong Kong’s Hang Seng rose 0.47%. Japan’s Nikkei, however, shed 0.13%. European equities edged lower with key indices from the continent, like in London’s FTSE, France and Germany and the UK, were lower by up to 1.06%.