Stock Market: Rally sets in after retracement; sectoral shift shaping up

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By S Jha

New Delhi, April 24: The Indian equity indices sharply rallied on Monday on the back of the strong performance by financials led by ICICI Bank. Strong retail participation in the equity market following a clear easing of inflation appears setting up the bourses on strong footing.

The domestic institutional investors poured in Rs 1177 crores in the cash market even while their foreign counterparts were net sellers. With strong retail participation seen for the last few weeks, the bourses are suggesting resilience.

Nifty rallied by over 120 points even while the index was briefly in the negative. The Bank Nifty carried the weight of the street on its shoulder after the ICICI Bank gave a solid start on the back of another stellar quarterly results. Brokerages have upped their bets on ICICI bank, with some even giving the target in excess of Rs 1100. The private bank has been dishing out strong numbers quarter after quarter on the back of strong technology adoption.

ICICI bank was in the good company of Axis Bank, SBI and HDFC Bank, which also rallied strongly, to give Bank Nifty at one time a gain of over 580 points.

HDFC Life, reacting on the back of the news that HDFC Bank now has the regulatory nod to hike the stake was the star performer on Monday. HDFC twins also reacted strongly to give a firm direction to the broad-based rally.

In the last few weeks, it has been seen that value picking has emerged, with a clear sectoral preference being shown. The railway stocks are evidently clear favourites. Rail Vikas Nigam Limited and IRCON gained strongly. Both the scrips have scaled their 52-week peaks, and are seen trending up. Earlier, Titagarh Wagon had strongly rallied.

Some buying interests also returned to the IT stocks, which had been battered after the disappointing results of the behemoths Infosys and TCS. Wipro rallied in the IT pack on the back of buyback news. However, the IT stocks are not yet strongly rallying. They have been the most laggard in the company of the realty companies for the past 18 months.

Mirza International, a shoe-manufacturer, has sprung a surprise in the market by doubling within a few days. The share price has zoomed from the level of Rs 30 to over Rs 65 now. It was smashed after the de-merger with Red Tape, which will separately list on the bourses soon.