The BSE Sensex jumped over 225 points to edge past the psychological 26,000 mark for the first time since January 4. The broader Nifty surged over 60 points to inch near the key 8,000 levels.
Domestic stock markets were buoyed by strong trading in Asia, where shares held near 5-1/2-month highs tracking a rally in oil prices. Japan’s Nikkei gained 2.5 per cent, while markets in China traded with a positive bias.
Private sector lender ICICI Bank jumped over 7 per cent to top the Nifty50 index, after Credit Suisse upgraded the stock to outperform. Recognition of bad loans and the moderation in steel sector stress (to which ICICI Bank has significant exposure) will aid ICICI Bank’s re-rating, the investment bank said.
State-run Bank of Baroda and State Bank of India also saw strong buying interest amid renewed optimism in banking stocks.
Meanwhile, IT major Wipro slumped over 5 per cent after a string of brokerages downgraded the stock post Q4 earnings. Wipro’s IT services margins fell by 10 basis points to 20.1 per cent compared to the prior quarter. On a year-on-year basis Wipro’s margins fell by 2 percentage points.
For the Jan-March fourth quarter, Wipro reported a consolidated net profit of Rs. 2,235 crore. Analysts on average were expecting the company to report profit of Rs. 2,343 crore for the three-month period, according to Thomson Reuters data.
Citi downgraded Wipro to “sell”, saying organic growth is slowing and margins are under pressures. Morgan Stanley also downgraded Wipro to “underweight”, citing weak Q1 guidance. EBIT margin is likely to face pressure, it added.
As of 09.30 a.m., the Sensex traded 194 points higher at 26,038, while the Nifty was up 51 points at 7,966.