After Market: Total m-cap jumps Rs 7 lakh crore; losses of entire year recovered in a day – Economic Times

Led by massive gains in auto and banking stocks, thanks to a corporate tax rate cut, Indian equity market rallied to make new records on Friday. Investors got richer by Rs 7 lakh crore, recouping almost all losses suffered in m-cap this year.

Maruti Suzuki saw biggest single-day intraday rally in seven years and closed 11 per cent higher on BSE. Its peers in the auto sector also logged massive gains with six of them rising in double-digit percentages.

HDFC Bank, which was the largest contributor to the Sensex rally, also helped Nifty Bank index record its largest gain ever. Sensex closed with gains of 1,921 points, topping the 38,000 level. Nifty jumped 570 points to end just shy of 11,300.

“The FM has done what it takes to trigger animal spirits in the industry. The unprecedented rise is a result of a massive short covering and augurs well,” VK Sharma, Head – PCG & Capital Market Strategy HDFC Securities, said.

Here is a lowdown on key movers and shakers of Friday’s session:

Investors recovered yearly losses!
The BSE market capitalisation soared about Rs 6.81 lakh crore for the day. The marked cap soared from 138 lakh crore on Thursday to Rs 145 lakh crore on Friday. This is against nearly Rs 7 lakh crore erosion in market value, BSE-listed companies witnessed this year till Thursday, data available with BSE showed.

The m-cap of BSE listed companies stood at Rs 144.48 lakh crore as of December 31, 2018.

HDFC twins alone contribute 550 pts
HDFC Bank contributed 418 points to Sensex the 1,921 point rally. HDFC chipped in 130 points. Other major positive contributors include Reliance (240 points), ICICI Bank (193 points) and L&T(134 points).

12 of top 100 stocks hit 52-week highs
A dozen of the BSE100 stocks hit their 52-week high. They include Asian Paints, BPCL, Crompton, Dabur, HUL, Kotak Mahindra Bank and Voltas, among others. Overall, 71 stocks on the exchange hit their one-year high levels on Friday.

197 stocks hit upper circuit limits
As many as 197 stocks hit the upper circuit on Friday on BSE. Major names included Indiabulls Integrated Services, Navkar Corporation, Lyka Labs, Omax Autos, etc.

Auto stocks hit top gear
Beaten-down auto stocks came to the party as the government announced corporate tax cuts. All 15 constituent stocks in the index ended in the green, six of them closing with gains in double digits. Ashok Leyland (up 19 per cent), TVS Motor (up 14 per cent), Eicher Motors (up 14 per cent) and Hero MotoCorps (up 12 per cent) led the rally. Auto stocks have been hammered in the last few months thanks to the slowdown in the sector. The tax cut gave companies a lot to cheer about.

RC Bhargava, Chairman, Maruti Suzuki welcomed the decision and said, “The government has taken a major step that suddenly focuses on the importance of manufacturing and focuses on making manufacturing a very attractive avenue for investment. I think it is a very innovative and an extremely important step.”

In terms of earnings per share (EPS), auto and auto ancillaries are expected to benefit the most. Eicher Motors is projected to gain 10-12 per cent in EPS thanks to the tax rate cut. Similarly, M&M (8-9 per cent), Exide (4-5 per cent), Bharat Forge (7-8 per cent), Maharashtra Scooters (3-4 per cent) and CEAT (6-9 per cent) are set to gain.

Eicher Motors and Bharat Forge pay taxes at the rate of 35 per cent. Exide and Maharashtra Scooters pay the tax at 33 and 32 per cent, respectively.

Nifty Bank logs biggest-ever gains
Banking index on NSE surged 8.3 per cent buoyed by RBL Bank, Federal Bank IndusInd Bank and SBI, each of which recorded double-digit gains. All constituents of Nifty Bank ended in the green.

Most banks are in the highest tax categories paying upwards of 32 per cent of their profits in taxes. The tax rate cut will positively impact their earnings.

IT sector sole loser
Among sectors, IT sector was the sole loser on the NSE. Nifty IT clocked a fall of 0.2 per cent as the rupee strengthened by 31 paise intraday. Big names such TCS (down 1.6 per cent), Infosys (down 1.6 per cent) and Tech Mahindra (0.5 per cent) ended the day in the red.

57 stocks give buy indicator
As many as 57 stocks crossed above MACD Signal line, generating indicators to buy. Major names among them include Exide Ind, Berger Paints, Voltas, ICICI Bank, Axis Bank, Delta Corps, etc.

Volume shockers
Among the most active stocks in terms of volume, YES Bank was again at the top with about 40 crore shares changing hands during the day. Vodafone Idea (18 crore), Ashok Leyland (12 crore) and Tata Motors (7.3 per cent) were among the top.

Most active stocks by value
HDFC was the most active stock by value on NSE, with transactions worth Rs 3,710 crore for the scrip. Maruti Suzuki (Rs 3,187 crore), ICICI Bank (Rs 3,097 crore) and Reliance Industries (Rs 2,726 crore) were the other most active stocks by value.


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