Markets soar on global cues

Markets soar on global cues
Business Standard, December 24, 2009, Page 1

BS Reporter / Mumbai

Markets today surged after Finance Minister Pranab Mukherjee said economic growth may accelerate at a faster pace and the stimulus package would continue till the Budget. The feel-good mood got a further boost from a positive sentiment in the global markets.

The Sensex soared 539 points to regain the 17,000 level after six trading days and closed 3.23 per cent higher, at 17,231.11. The Nifty surged 158.75 points (3.18 per cent) to 5,144.60.

US markets rallied on Tuesday, on better-than-expected home sales data. The Dow Jones added 0.49 per cent to 10,464.93. The Nasdaq and the S&P 500 were also up. European indices were at a 14-month high. Asian stocks, too, ended in the green.

“The market moved up sharply today on the back of short covering by bears and build-up of fresh longs by bulls. The perception that the global economy is recovering faster than what the market was expecting, triggered buying,” said Avinash Gupta, assistant vice president, Research Equity, Bonanza Portfolio.

All sectoral indices were in the green as the metal index shone. The index jumped 4.05 per cent to 17,091.37. The metal stocks led the rally, with Hindalco gaining 7.77 per cent and Tata Steel 4.45 per cent. Both stocks reported a new 52-week high in trades today.

Oil & gas, power, IT and capital goods gained over 3 per cent each. Reliance was the star performer. It surged 4.62 per cent to Rs 1,065.90. Other heavyweights — Infosys, ICICI Bank and Larsen & Toubro — rallied 3-4 per cent each.

Banking stocks also gained sharply, with ICICI Bank rising 4.5 per cent on expectations that loan demand may rise. Housing Development Finance Corporation soared 3.2 per cent to Rs 2,645.05.

In a report today, Morgan Stanley economist Chetan Ahya said India’s central bank would probably raise interest rates at the end of January and won’t take any immediate steps to tame food price inflation that touched an 11-year high. “There appears to be little evidence to support the view that the rise in food prices has been driven by current loose monetary policy,” Ahya further said, adding, “the Reserve Bank is unlikely to tame food price inflation through monetary policy action”.

Maruti Suzuki added 1.83 per cent on news of a proposed launch of new multipurpose vehicle. PSU stock NTPC advanced 6.96 per cent. Realty stocks Jaiprakash Associates, Reliance Infrastructure and DLF jumped.

IT stocks rebounded after yesterday’s fall as data in the US showed the economy was on the path of recovery. Infosys jumped 3.28 per cent, TCS went up 2.80 per cent and Wipro advanced 2.11 per cent in trades today.

The BSE market breadth was positive. Out of the 2,922 stocks traded, 1,902 advanced, while 927 declined.