Mumbai: The BSE benchmark index Sensex on Tuesday gained 117 points to close at a six-week high in a volatile trade on buying mainly in HUL after Unilever announced open offer to hike stake in its Indian arm and government assuring investors TRCs will be accepted as certificate of residence.
Markets opened on a firm note and touched a high of 19,622.68 points on buying in FMCG stocks mainly in HUL after Unilever Plc said it will spend USD 5.4 billion to boost its stake in its Indian unit Hindustan Unilever to 75 percent.
However in afternoon trade, markets slipped into the negative zone touching day's low of 19,317.38 as the World bank scaled down India's growth forecast to 6.1 percent for the current fiscal from earlier estimate of 7 percent.
Later, passage of the Finance Bill and Finance Minister P Chidambaram assuring foreign investors that Tax Residency Certificate (TRC) issued by a foreign government will be accepted as a certificate of residence bolstered the sentiment, brokers said.
Posting gains for the second straight day, the BSE barometer closed higher by 116.68 points, or 0.60 percent, at 19,504.18. It had last ended at 19,570.44 on March 14, 2013.
The National Stock Exchange index Nifty also rose by 26.10 points or 0.44 percent to 5,930.20.
"The indices begin to look wobbly with the Opposition once again disrupting Parliamentary proceedings. The only silver lining was passage of the Finance Bill and that too without a debate," brokerage India Infoline said in a note.
"Clarity in TRC led to a pullback in markets today. However, with the political tension resurfacing yet again after the Supreme Court said that sharing information by the CBI with the government on coal block allocation scam has shaken the entire process, has created more worry and instability going ahead," India Infoline Head of Research Amar Ambani said.
FMCG major Hindustan Unilever (HUL) jumped by 17.28 percent to become the top gainer among the 30 Sensex stocks. Unilever Plc offered to acquire 48.70 crore shares, or 22.52 percent stake, in its Indian arm at Rs 600 apiece each.
In 30-BSE index-components, 18 stocks gained.
Among other major gainers, ITC rose by 1.40 percent and Mahindra & Mahindra by 2.24 percent. Tata Motors rose by 1.15 percent while ICICI Bank gained nearly one percent.
The FMCG sector gained the most by 4.65 percent to 6,548.52 backed by HUL.
The metal index was second best performer by adding 0.96 percent to 8,651.05 as copper maker Sterlite Industries rose 4.03 percent on higher quarter earnings.
Foreign institutional investors bought shares worth a net Rs 620.38 crore yesterday as per provisional data from the stock exchanges.
Asian stocks ended mostly higher today after US housing sales gained and amid speculation central banks will keep stimulating growth.
Key benchmark indices in Hong Kong,Taiwan, Singapore and South Korea rose by 0.19 percent to 1.20 percent while Japan's Nikkei eased by 0.17 percent. However, China market remained closed today.
European markets were trading narrowly mixed. DAX was quoted up by 0.68 percent while CAC and UK moved down by 0.03 percent to 0.28 percent.
Other major gainers were Wipro (1.75 percent), Coal India (1.64 percent), Dr Reddy's Lab 1.56 percent, Sun Pharma (1.04 percent).
However, HDFC dropped by 1.94 percent followed by HDFC Bank 1.71 percent, Hindalco Ind 1.57 percent and Larsen 1.10 percent.
The S&P BSE-Realty dropped by 1.07 percent.
The total market breadth turned negative as 1,271 stocks ended in red while 1,067 stocks finished in green. The total turnover shot up further to Rs 4,313.93 crs from Rs 2,358.59 crs yesterday.
The BSE and the National Stock Exchange (NSE) will remain closed tomorrow, May 1, on account of Maharashtra day.