Bank stocks lift indices after Supreme Court order on loan moratorium

 Reversing last session's losses, the 30-share BSE Sensex ended 280.15 points or 0.56 percent higher at 50,051.44

Equity indices regained their footing on Tuesday, propelled by banking stocks which surged after the Supreme Court declined to extend the loan moratorium period and said complete waiver of interest is not possible.

Reversing last session's losses, the 30-share BSE Sensex ended 280.15 points or 0.56 percent higher at 50,051.44. Similarly, the broader NSE Nifty advanced 78.35 points or 0.53 percent to close at 14,814.75.

UltraTech Cement was the top gainer in the Sensex pack, rising 3.06 percent, followed by IndusInd Bank, ICICI Bank, HDFC Bank, Titan, Axis Bank, SBI, and Reliance Industries.

ONGC, PowerGrid, ITC, NTPC, M&M, and HDFC were among the laggards, shedding up to 2.28 percent.

The apex court on Tuesday refused to interfere with the Centre’s and the RBI’s decision to not extend the loan moratorium beyond August 31 last year. A Bench headed by Justice Ashok Bhushan said the court cannot do a judicial review of the Centre's financial policy decision unless it is malafide and arbitrary.

It also directed no compound or penal interest to be charged during the six-month moratorium period but added complete waiver of interest is not possible as it will have huge financial implications.

“Domestic market ended the day on a strong footing supported by a rally in banking stocks amid weak cues from global markets. Sentiments in the banking stocks were lifted post-Supreme Court’s order against granting interest waiver and extension of moratorium period,” said Vinod Nair, Head of Research at Geojit Financial Services. “Its decision to not charge compound interest added a minor concern in the banking space.”