Sensex zooms 382 pts to 6-week high on Fed comments
Mumbai: The key S&P BSE Sensex surged 2 percent Thursday to close at a six-week high of 19,676.06, tracking global stock markets that were boosted by US Federal Reserve Chief Ben Bernanke's comments on continuing monetary stimulus.
The 30-share gauge opened higher, following firm Asian cues, and rallied to 19,723.51. At the close, it added 381.94 points to 19,676.06, the highest level since 19,760.30 reached on May 31. It dropped 0.75 percent on Wednesday.
Trading sentiment was bolstered after Bernanke last night signalled that the monetary stimulus would continue for some time, boosting the prospects of fund flows to the emerging markets, brokers said. The Fed's bond-buying programme, which has flooded global markets with liquidity, has helped support an array of assets, including equities.
Cautious investors picked fundamentally strong stocks ahead of the earnings season, starting tomorrow with first-quarter results from Infosys.
The broader Nifty index on the National Stock Exchange gained 118.40 points, or 2.04 percent, to close at 5,935.10. The SX40 index of the MCX-SX closed 211.03 points, or 1.83 percent, higher at 11,744.81.
Investors were richer by nearly Rs 1 lakh crore as overall 1,358 stocks rose while 974 declined on the BSE platform.
"Indian markets rallied strongly, propelled by comments from Mr. Bernanke," said Sanjeev Zarbade, Vice President - Private Client Group Research, at Kotak Securities. "Going ahead, we have the Infosys numbers. While the recovery in markets is comforting, crude oil has again firmed up...We remain concerned on this front.?
The rupee, which rose to a one-week (rpt) one-week high in early trade, erased those gains to close marginally weaker at 59.67 against the dollar.
Overall, 12 of the 13 sectoral indices gained, adding between 0.55-3.00 percent, with metals, banking, realty, capital goods, refinery and PSU segments taking the lead.
The major Sensex gainers included HDFC Bank, ITC, HDFC, TCS, Reliance Industries, ICICI Bank, L&T, ONGC, Bharti Airtel, Infosys and SBI.
L&T closed 2.65 percent up as the stock turned ex-bonus.
Speaking on his expectations for Infosys earnings, Amar Ambani, Head of Research at IIFL, sees Infosys posting a net sales of Rs 10,855 crore, gain of 3.8 percent quarter- on-quarter (QoQ). On the operating profit margin front, he expects the IT major to post a 1.1 percent QoQ fall.
Kishor P Ostwal, CMD, CNI Research Ltd. Said: "Nifty closed near 5940 which is technically in buy mode. Infosys result which is lined up before market could create scary position on either side. Results could be in line but guidance will either spook Infosys and Nifty or could boost them...If Infosys disappoints, it may fall 8 to 10 percent."
Asian stocks closed sharply higher on Bernanke's comment. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan rose by 0.39 percent to 3.23 percent.
European markets too were trading higher in early trade. France's CAC was up by 0.70 percent, Germany's DAX by 1.05 percent and the UK's FTSE by 0.82 percent. US index futures too were indicating firm opening today.
In the domestic market, 27 of the 30 shares from the Sensex pack closed with gains while Maruti Suzuki, Wipro and Cipla finished with losses.
Major gainers were Sterlite Ind (4.78 percent), Hindalco Ind (4.74 percent), HDFC Bank (3.32 percent), Bharti Airtel (3.21 percent), Hero Motocorp (3.27 percent), CIL (3.21 percent), TCS (3.10 percent), HDFC (2.86 percent), ONGC (2.68 percent), L&T (2.65 percent) and Tata Power (2.26 percent).
ITC (2.17 percent), Tata Steel (1.97 percent) and ICICI Bank (1.91 percent), Gail India (1.79 percent), SBI (1.74 percent), RIL (1.64 percent), NTPC (1.63 percent), Dr Reddy's Lab (1.41 percent), and Sun Pharma (1.30 percent) also notched up good gains.
However, Maruti lead losers with a drop of 2.43 percent.
Among the sectoral indices, S&P BSE-Metal rose by 3.00 percent, followed by S&P BSE-Bankex (2.48 percent), S&P BSE-Realty (2.44 percent), S&P BSE-CG (1.84 percent), S&P BSE-Refinery (1.8 percent), S&P BSE-PSU (1.77 percent), S&P BSE-Teck (1.52 percent), S&P BSE-Power (1.51 percent), S&P BSE-FMCG (1.44 percent) and S&P BSE-IT (1.43 percent).
Total turnover dropped to Rs 1,433.15 crore from Rs 1,619.83 crore yesterday. Meanwhile, Foreign institutional investors bought shares worth Rs 75.46 crore yesterday as per provisional data with stock exchanges.