Sensex ends 213 pts higher on global cues, buying in banks
02 Aug 2010
After witnessing consolidation for the last three weeks, equity benchmarks turned healthy on Monday, supported by global cues and buying in heavyweights - especially in the financial space post ICICI Bank's quarterly numbers. Even short covering lifted markets a bit, leading the Sensex and Nifty closing above their psychological levels - 18000 and 5400, respectively.
Richard Kang, CIO of Emerging Global Advisors is betting on India outperforming in the coming years and sees no reason why India cannot generate its own form of soft landing. Kang told CNBC-TV18 the Indian situation is quite robust as it is less exposed to Europe and the US. Global investors are chasing India for its strong and high growth, he says. According to Kang, domestic consumption is the real story for India as it is not reliant too much on exports.
European markets touched three-month high post banking results; Britain's FTSE, France's CAC and Germany's DAX were trading 1.7-2% higher, at the time of closing of Indian equities. HSBC and BNP Paribas posted better-than-expected results; both companies' shares gained over 4%.
HSBC's half-year profit more than doubled from a year ago as bad debts fell sharply, and Europe's biggest bank said it remained bullish on the outlook for emerging markets. HSBC reported a pretax profit of USD 11.1 billion for the six months to the end of June, up from USD 5 billion a year ago. BNP Paribas, France's biggest listed bank, trumped profit expectations thanks to lower loan provisions and strong retail banking, offsetting volatile financial market conditions that hit investment banking.
US futures like Dow Jones and Nasdaq futures rallied one percent each. Asian markets also ended positive; Shanghai, Hang Seng, Straits Times, Kospi and Taiwan rose 1.3-2%. Nikkei was up just 0.35%.
Indian markets also lifted by financials post ICICI Bank numbers, which were in-line with estimates but showed improvement in asset quality. ICICI Bank gained 3.83% as its Q1 net profit rose 16.82% at Rs 1,025.98 crore. Net non-performing asset (NPA) ratio was down to 1.62% from 2.33% (YoY). Provisions declined 39.7% to Rs 798 crore from Rs 1323.6 crore.
