Sensex rallies 377 pts; Kotak Bank zooms 12%

Mumbai: Equity benchmark Sensex rallied 377 points on Tuesday, tracking massive buying in Kotak Mahindra Bank after the lender posted strong quarterly earnings.

The 30-share BSE index ended 376.60 points or 0.94 per cent higher at 40,522.10. Similarly, the broader NSE Nifty surged 121.65 points or 1.03 per cent to 11,889.40.

Shares of Kotak Mahindra Bank soared around 12 per cent after the lender reported a 22 per cent growth in consolidated net profit at Rs 2,947 crore for the July-September quarter.

Without denying speculations about a merger with smaller rival IndusInd Bank, the private sector lender said the objectives of its recent Rs 7,000-crore capital raising exercise included acquisitions but added that it will be using the money judiciously.

According to Emkay Global Financial Services, despite subdued credit growth, Kotak Bank reported a strong profit, mainly due to high treasury gains (including equity) and contained provisions as the bank believes that it is well guarded for the incoming asset quality stress.

Other gainers included Nestle India, Asian Paints, Bajaj Finance, NTPC, L&T, Axis Bank and Bajaj Auto.

On the other hand, TCS, ONGC, Infosys, HDFC and SBI were among the laggards.

Bulls took centre stage as Kotak Bank led the financial pack’s rally. Afternoon trade witnessed FMCG taking control supported by cement stocks. Broader markets also saw participation across select counters, said S Ranganathan, Head of Research at LKP Securities.

On the global front, bourses in Hong Kong, Seoul and Tokyo ended on a negative note, while Shanghai was in the positive territory.

Stock exchanges in Europe were also trading in the red in early deals amid restrictions imposed on economic activities in countries like Spain and Italy.

Meanwhile, international oil benchmark Brent crude was trading 0.76 per cent higher at USD 41.12 per barrel.

In the forex market, the rupee settled 13 paise higher at 73.71 against the US dollar.