BackSensex, Nifty scale fresh highs led by NBFCs
Gains in non-banking finance companies lifted indices. News of successful covid vaccine trials also boosted investor sentiment
PremiumMUMBAI: Indian stock indices hit their respective record highs on Monday led by gains in non-banking finance companies. News of successful covid-19 vaccine trials also boosted investor sentiment across the globe.
The benchmark Sensex hit a fresh high of 44,271.15, up 1% from the previous close. The Nifty 50 index also gained 1% to touch 12,964. At 2 pm, Sensex was up 0.77% at 44,186, while Nifty was 0.76% higher at 12956.60.
"With the end of the earnings season, focus will shift back to economic recovery and market valuations. Risk to the markets is from a resurgence of covid infections in India", said Sanjeev Zarbade, VP PCG Research, Kotak Securities
Analysts expect volatility to remain high next week ahead of the expiry of the future and options contracts for the November series.
Shares of NBFCs surged as a committee of the Reserve Bank of India (RBI) on Friday recommended the guarded entry of corporates into the banking space, conversion of big NBFCs into banks and hike in promoters’ stake in private lenders to 26% from 15%.
Shares of IDFC, Equitas Holdings, Equitas Small Finance Bank, Ujjivan Financial Services Ltd, and Ujjivan Small Finance Bank surged 10-20%.
Analysts said large non-bank lenders stand to gain the most from the RBI panel’s proposal to allow large companies and shadow lenders into banking services.
“If allowed, they would give strong competition to incumbents and may come up with innovative solutions with no legacy baggage. We may see greater damage on the CASA / retail liability front, especially at inefficient banks, as these entities have a strong ecosystem and enjoy high levels of trust among people," said Brokerage firm Motilal Oswal in a recent report.
Dr Reddy's Laboratories gained 3.3% today, while Tata Steel rose 2%. Dr Reddy's will replace Tata Steel in the Sensex index from 21 December, the BSE said on Friday.
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