Data shows the S&P 500 sits at more than 12 times its tangible book value, a record multiple.
The markets rallied on Monday because of buying in stocks of banks and financial companies amid strong global cues.
The Sensex jumped 448.62 points (1.12%) to close at 40,431.6 while the Nifty gained 110.6 points (0.94%) to close at 11,873.05.
The Nifty Bank was the highlight of the day, with the index gaining 3.12%, outperforming the benchmarks. The rally in financial stocks was driven by steady earnings reported by HDFC Bank. Foreign portfolio investors have remained buyers so far in October buying stocks worth $1.19 billion after becoming sellers in September.
The markets, which traded in the green throughout the trading session, were also helped by strong global cues after hopes of a fiscal stimulus in the US reignited. China’s third quarter GDP numbers boosted the sentiment, too. Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “Global cues turned positive on hopes of a fresh US stimulus package before the presidential election in November and expectations of a Covid-19 vaccine by the year-end. China’s GDP data released today showed that the economic recovery quickened in the third quarter even as the overall growth missed the forecast. On the domestic side, encouraging reports on the Covid-19 front and strong results by HDFC Bank lifted sentiments.”
Monday’s show was primarily led by the Nifty Bank and the top gainers in the index were Bank of Baroda, Federal Bank, ICICI Bank, Axis Bank and State Bank of India, up by 8.3%, 7.47%, 5.01%, 4.2% and 4.11%, respectively. This came after the results that HDFC Bank announced on Saturday. Interestingly, the stock of the largest bank by market capitalisation was up only by 0.3% to close at Rs 1,203. Brokerages such as Jefferies have maintained their ‘buy’ rating on HDFC Bank. In its report, Jefferies said, “HDFC Bank’s Q2 fiscal year 2021 profit of Rs 75 billion, up 18% year-on-year (YoY), was healthy even if tad below estimate. Key positive was collections of 97% of September dues…”
The turnover in the futures and options segment stood at Rs 16.35 lakh crore, according to NSE data. Similarly, cash market saw volumes worth Rs 48,150.37 crore. These were against the six-month average of Rs 16.78 lakh crore and Rs 56,614 crore, respectively.
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