Sensex closes at 19-month high; zooms past 19,000 level

Sensex Thursday surged by nearly 329 points to close at 19-month high of 19,170.91 on Goldman Sachs' upgrading Indian stocks and continued optimism that government will push through key economic reforms.

Updated: Nov 29, 2012, 22:57 PM IST

Mumbai: The BSE benchmark Sensex Thursday surged by nearly 329 points to close at 19-month high of 19,170.91 on Goldman Sachs' upgrading Indian stocks and continued optimism that government will push through key economic reforms.

The Indian indices ended up as the best performer of the day in Asia-Pacific. Many market analysts have forecast that Sensex could even breach its all-time high of over 21,000 level next year.

"19,000-level has come sooner than most people expected. We would see much higher levels in the months to come," said Manish Sonthalia, VP and Fund Manager Motilal AMC-PMS.

After rising to a day's high of 19,205.33, Sensex closed with a gain of 328.83 points, or 1.75 percent, at 19,170.91, its highest since April 28, 2011.

In the 30-share Sensex, 26 stocks closed with gains led by Bajaj Auto, ICICI Bank, Tata Motors, Cipla and Sterlite. L&T, HDFC, HDFC Bank, RIL and ITC also helped cement gains.

Realty, banks, auto and capital good shares attracted good buying and their sectoral indices ended higher in the range of 1.5-3.4 percent.

Across the BSE, over 1680 stocks gained Thursday, helping the investor wealth zoom to Rs 66.74 lakh crore, up by Rs 80,000 crore in a single session.

Today is the second straight day the benchmark has gained over 300 points. Sensex soared by 305 points on Tuesday after credit rating agency Moody's kept India's outlook stable.

Brokers said investors also appeared confident that the UPA government will excel in a trial of strength over FDI in retail issue to be witnessed in Parliament next week.

The 50-share NSE index Nifty closed 97.55 points, or 1.70 percent, higher at 5,825. Nifty may clock a rise 14 percent by 2013-end, Goldman Sachs said in a report today, upgrading its recommendation on India to overweight from market-weight.

"For India, upside drivers include a recovery in growth, a decline in inflation, and the potential for continued policy reforms," Goldman Sachs said adding that with structural issues being addressed and a cyclical recovery on the horizon, the market may bounce strongly next year.

Helped by increased inflows, the rupee bounced back to 54.85 levels against the dollar up over 1 percent Thursday.

Markets have started factoring in some further announcements on fiscal reforms with the deadlock on retail FDI issue being resolved, said Dipen Shah, Head PERCENTG Research, Kotak Securities.

A smooth ending to the current month's settlement in the derivative segment and a higher global trend as optimism grew that US President Barack Obama will reach an agreement with Congress over a new budget, further influenced the sentiment, said analysts.

Meanwhile, other Asian markets, barring China which closed weak, ended with gains between 0.92-1.15 percent on overnight smart rally on Wall Street after US President Barack Obama and House Speaker John Boehner expressed optimism about a deal to solve the upercentoming "fiscal cliff".

European stocks also were quoting higher in the afternoon deals. The CAC was up by 1.18 percent, the DAX by 0.70 percent and the FTSE by 0.77 percent.

Speaking on Indian markets, Kishor P Ostwal, CMD, CNI Research said: "Nifty closed at multi-month highs as expected as it crossed resistance of 5,770... Tomorrow fresh settlement is beginning. If market opens up with gap and sustains 5,840 even for two hours, we may see 6,000 next week."

Major gainers from the Sensex pack were Bajaj Auto (5.01 percent), ICICI Bank (4.59 percent), Tata Motors (4.45 percent), Cipla (3.59 percent), Sterlite Ind (3.09 percent), HDFC (2.96 percent), HDFC Bank (2.73 percent), L&T (2.62 percent) and Tata Power (2.42 percent).

However, Hero Motocorp dropped by 1.03 percent and Infosys by 0.98 percent.

11 out of 13 sectoral indices closed with gains while only BSE-IT and BSE-Teck finished with losses. The BSE-Realty was the top gainer with a rise of 3.38 percent, followed by Bankex (2.76 percent), BSE-Auto (2.08 percent), BSE-CG (1.55 percent) and BSE-CD (1.45 percentt).
Total turnover moved up further to Rs 3,341.97 crore from the Tuesday's level of Rs 3,257.31 crore.