Markets end higher ahead of US banks' stress test results

07 May 2009

The benchmark indices closed on a strong note ahead of US banks' stress test results on Thursday. Positive global cues were also supportive to our markets. Metal, financial, telecom and infrastructure stocks witnessed buying interest while FMCG, cement, oil marketing and select technology companies' shares remained under pressure.

The 30-share BSE Sensex closed 164.19 points or 1.37% higher at 12,116.94 and the 50-share NSE Nifty shut shop at 3683.90, up 1.62% or 58.85 points over previous close. But the broader indices outperformed the benchmark indices - the BSE Midcap Index was up 101.10 points or 2.75%, to settle at 3,776.94 and the Smallcap Index rose 2.66% or 110.59 points, to 4,263.60.

Metals hogged the limelight on the back of better April sales numbers and price increase. Short covering and fresh buying were seen in metal stocks. The BSE Metal Index went up 619.71 points or 8.22%, to close at 8,155.08. SAIL reported April sales at 8.5 lakh tonnes as against 6.6 lakh tonnes, a growth of 28.79% and Tata Steel April sales went up 31% at 4.52 lakh tonnes (YoY); both stocks were up 7.41% and 8.76%, respectively. Among the others, Hindustan Zinc, Sterlite, JSW Steel, Jindal Saw, Hindalco, JSL, Sesa Goa and NALCO gained 5-14.8%.

Among the financial stocks, Andhra Bank was up 5.28% ahead of its Q4 numbers. PNB, SBI and Axis Bank were up 3.3-3.5%. ICICI Bank gained 1.53% and HDFC Bank was up 0.40%. The BSE Bankex closed 68.52 points or 3.72% higher at 1,912.44. HDFC shot up 4.4%, which is not a part of Bankex.

US banks' stress test results will be announced on Thursday. Leaked stress-test reports suggest that most banks were healthier than previously thought. US Treasury Secretary Timothy Geithner said that none of the 19 banks being examined are at risk of insolvency.

There were reports that Bank of America, Wells Fargo and Citigroup probably need additional capital. However, JPMorgan Chase, Goldman Sachs, American Express, Regions Financial and Bank of New York Mellon will need no additional capital.