Sensex zooms 443 points to new 7-month high on diesel hike, Fed move
Mumbai: Rising for the eight straight day, the Sensex Friday vaulted 443 points to close at 18,464.27, a fresh 7-month high, after investors cheered the government's decision to hike diesel prices and US Federal Reserve approved a new stimulus plan.
The positive sentiment prevailed despite inflation rising by a higher-than-expected 7.55 percent in August, which may restrain the RBI from cutting interest rates at its monetary policy review next week, said dealers.
The BSE benchmark index opened 260 points higher tracking overnight gains in US markets. Reports of a new Quantitative Easing (QE) plan by Fed and hopes that India will taken more steps after hiking diesel price by Rs 5.63 per litre and capping supply of subsidised LPG, set the trading trend.
As day progressed stocks built on the momentum as 24 shares of the 30-share Sensex rose. Gains were led by Jindal Steel and Hindalco which rose over 8 percent each. RIL, SBI and ICICI Bank rose around 5 percent each helping Sensex rise 443.11 points -- the biggest single-day gain clocked in 2012.
The index had gained 439.22 points on June 29, 433.66 points on June 6 and 421.44 points on January 3.
The 50-share National Stock Exchange index Nifty rose by 142.30 points, or 2.62 percent to 5,577.65. In the broader BSE market, nearly 1,500 stocks rose taking investor wealth up by nearly Rs 1 lakh crore to Rs 63.63 lakh crore.
"The US Fed announced QE 3. The Indian government hiked diesel prices which is being seen as breaking the perception of policy paralysis. Market was waiting for such an event," said Kishor P Ostwal, CMD, CNI Research.
Across 13 BSE sectoral indices, 11 indices rose with Realty, Metal and Bankex jumping 4-5 percent. Capital Goods, Auto, Oil&Gas and IT shares logged 2-3.5 percent gains.
Brokers said a firming trend in the Asian region and higher opening in Europe further fuelled the uptrend.
In the last 8 sessions, Sensex has gained over 1,100 points.