August started with a market trend that favoured the bulls

Broader markets closed flat on Monday as the action shifted to beaten down PSU banking shares where traders latched on to prices that are substantially below their book value. As a consequence, the banking sector was the top gainer in today's trade with the State Bank of India trading above its 200-day moving average.

Meanwhile, the Nifty ended 10 points higher to close at 8,543. Its Advance-Decline Ratio stood at 1:1 with State Bank of India, Bank of Baroda and ICICI Bank leading the front. On the losers' side were HCL Tech, post a dismal fourth quarter, Vedanta and BPCL. Strong gains were seen on the CNX Nifty Junior, CNX Small Cap Index and the CNX Midcap Index.

The Bank Nifty rose 185 points to 18,914 post the report from CLSA that said it saw a slight glimmer of hope in the earnings of 5 PSU banks, where there was moderation in the formation of new stress loans. The delinquency ratio too had moderated to 4 percent of past year's loans from 5 percent in the fourth quarter.

This report acted like a shot in the arm of PSU lenders with all 18 PSU banks' futures posting smart gains. The trend in other sectoral indices was equally strong. CNX Auto, CNX Finance and CNX Media Indices were the top gainers.

On the Bombay Stock Exchange, the Sensex rose 73 points to close the day at 28,187 points. ICICI, Maruti and Dr. Reddy's were the top gainers on the Index, while M&M, Coal India and Lupin were stocks that fell. As a consequence, the Advance-Decline Ratio on the Sensex stood at 17/13.

The trend in the wider market favoured the bulls with 1,769 stocks gaining versus 1,142 that ended below Friday's close.

Trade was flat in the derivatives space with Nifty Futures ending in the red. But Realty,Media, Banking and Auto sectors were the top gainers among 18 industries in both price and open interest. The Advance-Decline Ratio was a modest 88/69 in the futures and Options market.

Stocks that hit fresh 52 week highs were Aditya Birla Nuvo, Maruti, Bajaj Finance and Bajaj Finserv.

(Image credits: Indiatimes)