Indian equity benchmarks rose on Monday powered by across-the-board buying, amid strength in global markets though caution persisted over the prospect of steep hikes in COVID-era interest rates and the fear that they might hurt economic growth. Investors awaited more of financial results from India Inc for domestic cues after HDFC Bank's quarterly net profit fell short of Street estimates.

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Both headline indices rose as much as 0.9 percent in early deals following a gap-up start. The Sensex gained 486 points to touch 54,246.8 at the strongest level in morning deals, and the Nifty50 climbed to as high as 16,199.7, up 150.5 points from its previous close.

As many as 48 stocks in the 50-strong basket began the day in the green.

Wipro, Sun Pharma, Tech Mahindra, UPL and SBI — rising more than one percent each — were also among the top blue-chip gainers.

HDFC Bank fell one percent and was the top laggard. HDFC also declined, down 0.2 percent at the open.

Infosys, TCS, ICICI Bank, Larsen & Toubro and Kotak Mahindra Bank were the biggest contributors to the gain in both main indices in morning trade.

"A significant market trend is the change in leadership from IT and banking to consumption-driven FMCG and autos... IT is weak on fears of a possible US recession impacting tech spending by companies... Leading bank stocks are weak due to sustained selling by foreign institutional investors in spite of their improving fundamentals," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Broader markets also strengthened, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.8 percent and 0.7 percent respectively.

HDFC Bank shares fell more than one percent to Rs 1,346.6 apiece on BSE, after the quarterly net profit of the country's largest lender by market value fell short of Street estimates.

The bank saw strong loan growth and improvement in its net interest income — or the difference between interest earned and interest paid — but its asset quality — calculated as the percentage of bad loans in total loans — deteriorated.

For investors who do not have the HDFC twins as a core holding in their portfolio, this is a good opportunity to make them the top 4-5 components in the portfolio, Dipan Mehta, Director at Elixir Equities, told CNBC-TV18.

Overall market breadth was in favour of the bulls, as 2,275 stocks rose and 932 fell on BSE.

Global markets

Equities in other Asian markets rose sharply following a strong session on Wall Street, though caution persisted over steep hikes in interest rates ahead of a widely expected increase in Europe. MSCI's broadest index of Asia Pacific shares outside Japan was last up 0.5 percent. Japan's Nikkei 225 was also up half a percent.

S&P 500 futures were up 0.2 percent, suggesting a higher opening ahead on Wall Street.

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First Published:Jul 18, 2022 11:32 AM IST