Sensex, Nifty hit new record; Lakshmi Vilas Bank sinks 20%

By Reuters

  • 18 Nov 2020
Credit: Reuters

Indian shares reversed course to close at a record high on Wednesday, as a rally in automotive and banking shares offset worries about rising coronavirus cases globally and at home.

The blue-chip NSE Nifty 50 index has climbed 11% this month alone, mirroring a global advance in shares, as two sets of promising COVID-19 vaccine trial results boosted hopes of a quicker return to economic growth.

The Nifty 50 opened lower, but hit a record intra-day high in afternoon trading. It clocked a 0.5% gain to end at 12,938.25, while the S&P BSE Sensex gained 0.52% to close at 44,180.05.

Automotive stocks gained 3%, led by a roughly 10% jump each in Tata Motors and Mahindra and Mahindra amid expectations of strong vehicle sales during India's festive season that culminated with Diwali this week.

"From whatever dealer checks we have done, Diwali season demand for cars and utility vehicles has been very strong ... a lot of dealers are also running out of inventory," said Rusmik Oza, senior vice-president at Kotak Securities in Mumbai.

State-run lenders rallied and the index tracking them climbed 3.6%, with all 12 constituents clocking gains. State Bank of India jumped 4.9%, hitting its highest level since mid-March.

Many banks have pointed to improved retail demand during the festive season after reporting strong financial results in the September-quarter as bad loan provisions dropped.

Globally, shares were little changed on Wednesday as soft U.S. retail sales and a surge of new coronavirus cases weakened the euphoria from recent vaccine breakthroughs.

In India, New Delhi planned more curbs as the capital battled its worst phase in the pandemic, although new infections elsewhere in the country were falling.

On the Nifty 50, construction firm Larsen & Toubro gained 6.2%.

Lakshmi Vilas Bank fell 20% after India placed the troubled lender under a moratorium.