Sensex hits two-year high on GAAR deferral, rate-cut hopes
Mumbai: The BSE benchmark Sensex Monday jumped by 243 points to close at two-year high on all-round buying as government delayed implementation of controversial GAAR by two years amid rate cut hopes getting a shot in the arm as inflation in December declined to three-year low.
Registering its best gain in the calendar year, the BSE 30-share index remained in positive throughout the day to settle at 19,906.41 - a rise of 242.77 points or 1.23 percent.
Similarly, the 50-share NSE index Nifty shot up by 72.75 points, or 1.22 percent, to 6,024.05.
Inflation based on the wholesale prices declined to a three-year low of 7.18 percent in December, triggering buying in stocks. "Today's inflation print has actually strengthened the debate over whether the RBI should deliver a 25bp or a 50bp rate cut on January 29," said Barclays Research.
Soon after, the government said it has postponed implementation of controversial GAAR by 2 years to April 2016.
"The market sentiment was boosted by Finance Minister P Chidambaram's decision to defer implementation of General Anti-Avoidance Rules," Sanjeev Zarbade, Vice President, PCG Research, Kotak Securities.
Investor wealth zoomed by Rs 84,000 crore to Rs 70.80 lakh crore as nearly five out of ten stocks among 3,007 scrips traded on BSE today ended with gains.
In all 11 out of 13 sectoral indices closed with gains with realty, IT, Teck, consumer durable, refinery and PSU segments leading the pack while only auto and pharma sectors ended in negative terrain.
ONGC was the best gainer in Sensex as it rose 4.28 percent, followed by IT bellwether Infosys that continued its upward march for the second straight day gaining 3.49 percent today. TCS also rose by over 2 percent ahead of Q3 results.
In banking sector, ICICI Bank and HDFC gained in 1.6-1.9 percent range. RIL and ITC also supported market gains.
Stock markets, however, appeared to ignore data showing that retail inflation rose to 10.56 percent in December from 9.90 percent in November.
Foreign institutional investors (FIIs) bought shares worth a net Rs 825.18 crores on last Friday as per provisional data from the stock exchanges.
Globally, most Asian stocks ended higher as Chinese shares rallied before the release data this week that's expected to show China's economy is recovering.
Key benchmark indices in China, Hong Kong, South Korea and Taiwan rose by 0.06-3.06 percent while Singapore Straight Times index eased marginally.
European stocks were also trading higher. Key benchmark indices in France, Germany and UK moved up by 0.14-0.72 percent.
Back home, 20 scrips out of the 30-share Sensex pack ended with gains while nine finished with losses while HDFC Bank ruled steady.
Besides ONGC, Infosys and TCS, other major gainers from the Sensex were Jindal Steel (3.34 percent), HDFC (1.93 percent), Gail India (1.70 percent), ICICI Bank (1.66 percent), ITC (1.61 percent), Tata Steel (1.60 percent), L&T (1.50 percent), Bharti Airtel (1.45 percent), HUL (1.33 percent) and NTPC (1.31 percent).
However, Maruti Suzuki dropped by 1.72 percent, followed by Cipla (1.23 percent) and Bajaj Auto (1.14 percent).
Among sectoral indices, the BSE-Realty rose by 5.01 percent, the BSE-IT (2.57 percent), the BSE-Teck (2.37 percent), the BSE-CD (1.80 percent), the BSE-Oil&Gas (1.58 percent), the BSE-PSU (1.50 percent), the BSE-Metal (1.26 percent) and the BSE-CG (1.18 percent).
The total market breadth turned positive as 1,394 shares ended with gains while 878 closed with losses. Around 735 were flat. Total turnover dropped to Rs 2,280.41 crore from the last Friday's level of Rs 2,528.72 crore.