Sensex, Nifty hit new peak

MUMBAI, Nov 17 (Reuters): The BSE Sensex and Nifty rose to record highs on Monday as state-run lenders rallied after State Bank of India (SBI) reported better-than-expected asset quality in July-September, raising hopes for a revival in a sector laden by bad loans.
Sentiment also got a boost after trade deficit in Asia's third largest economy narrowed to $13.35 billion in October from $14.25 billion in September, according to government data.
Continued foreign buying also helped sentiment. Overseas investors bought shares worth 6.96 billion rupees ($112.8 million) on last Friday, bringing their total purchase in stocks to $15.24 billion so far in 2014.
"Reducing non-performing loans, along with falling inflation, is leading to a belief of higher profits at state-run lenders which will continue for sometime," said G Chokkalingam, founder of Equinomics, a research and fund advisory firm.
The BSE Sensex rose as much as 0.57 per cent to an all-time high of 28,205.71. The index ended up 0.47 per cent.
The Nifty closed 0.49 per cent up after earlier hitting a record high of 8,438.1.
State Bank of India led the rally in state-run lenders, ending 5.5 per cent higher after earlier hitting its highest intraday level since April 2011.
India's biggest lender reported late on last Friday better-than-expected asset quality despite posting a 52 percent increase in provisions for bad loans in its second quarter.
SBI's results attracted investors to state-run lenders, which have lower ownership and valuations relative to private sector rivals, traders added. Bank of Baroda rose 4.2 per cent, while Punjab National Bank ended up 2.7 per cent.
In government-run power sector lenders, Rural Electrification Corp jumped 10.2 per cent, while Power Finance Corp soared 7.6 per cent.
Among mid-cap banks, Central Bank of India rose 4.3 per cent, while Federal Bank advanced 3.2 per cent.
Rally in state-run lenders pushed the NSE bank index to an all-time high of 17,676.60 before closing 0.36 per cent higher.
Tata Motors shares also gained 4.1 per cent after earlier rising to its record high of 547.55 rupees on its unit Jaguar Land Rover's earnings, though the Indian auto maker reported a 7-per cent fall in net profit in the July-September quarter.
Balkrishna Industries slumped 7.1 per cent, adding to Friday's 16.6 per cent decline after price cuts weighed on July-September earnings, analysts said.