Sensex extends gains for 4th day, rallies 600 pts; HDFC twins sparkle

Equity benchmarks defied gravity for the fourth successive session on Tuesday as investors piled into finance and banking counters amid firm global cues following US President Donald Trump's discharge from hospital.

Encouraging macroeconomic data and anticipation of healthy Q2 results further buoyed sentiment, traders said.

The BSE Sensex zoomed 600.87 points or 1.54 per cent to close at 39,574.57.

Similarly, the broader NSE Nifty climbed 159.05 points or 1.38 per cent to end at 11,662.40.

HDFC was the top performer in the Sensex pack, surging 8.35 per cent, after the mortgage lender said its individual loan disbursements in the second quarter of 2020-21 reached 95 per cent of the year-ago level and September saw the strongest recovery since the COVID-19 outbreak.

Other prominent gainers were IndusInd Bank, Mahindra and Mahindra, Asian Paints, Bajaj Finance, HDFC Bank and Ultratech Cement.

HDFC and HDFC Bank accounted for over half of the Sensex's gains.

On the other hand, Tata Steel, Nestle India, Larsen & Toubro, Sun Pharma, NTPC and Reliance Industries slipped up to 1.26 per cent.

Asian shares followed Wall Street higher after US President Donald Trump was discharged from hospital following COVID-19 treatment. Investor sentiment was also boosted by hopes of a fresh US stimulus package.

European markets were mixed in opening trade.

On the macroeconomic front, India's service sector output broadly stabilised in September but remained in the contraction zone as incoming new business fell moderately due to the damaging impact of the pandemic on demand, leading to more job losses.

The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September to 49.8 from 41.8 in August.

Meanwhile, the Monetary Policy Committee (MPC) of the RBI will begin its three-day deliberations on Wednesday after the government-appointed three external members to the rate-setting panel.

"Market is booming to a new level in anticipation of better Q2FY21 results, clear improvement in domestic economic data and uptick in the global market. The IT and Banking sector will be in focus, in the coming weeks, in expectation of real benefit in Q2 result.

"Banks are showing healthy deposits and advance growth, with signs of recovery in growth to pre-COVID level, while positive SC verdict is also expected next week regarding moratorium," said Vinod Nair, Head of Research at Geojit Financial Services.

Among the sectoral indices, BSE finance, banking, realty, and auto rose as much as 3 per cent.

Of the 19 sectoral indices, 12 logged gains while seven suffered losses.

In the broader markets, the BSE midcap and small-cap indices spurted up to 0.59 per cent, underperforming the benchmark.

On the forex market front, the Indian rupee dropped by 17 paise to close at 73.46 per US dollar.

Foreign investors bought equities worth a net Rs 236.71 crore in the Indian markets on Monday, exchange data showed.