Sensex bounces back on strong investor sentiments

Mumbai: The benchmark BSE Sensex and CNX Nifty gained around three percent to end at one-month high during the truncated week, driven by strong investor sentiments on hopes of further policy reforms after a strong show by BJP in assembly elections in Maharashtra and Haryana.

The special Muhurat trading on Diwali, which marked the beginning of Samvat 2071, also saw the tide turn in favour of bulls after straight four-week of fall.

The BSE and the NSE were closed on October 23, 2014 for regular trading, but were opened from 18.15 hrs to 19.30 hrs for Muhurat session. The market were also closed on October 24, 2014 for observing "Diwali Balipratipada".

The global growth worries and capital outflows inundated the investors minds in the week in a way rebuffed by the investors community following government let loose a slew of reforms to prop up the economy after the Assembly poll results of Maharashtra and Haryana characterised that BJP could form the government in these two states.

The long-awaited de-regulating diesel prices, raising the cost of natural-gas thus curbing the subsidies to narrow fiscal deficit and ordinance for e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs, along with FIIs from sellers last week to net buyers mainly bolstered the sentiment.

The turn-around also came when global stocks bounced-back following positive US earning-data restored confidence over global economy.

The festive spirit energised the domestic market with the traditional 75-minute Muhurat session to usher Samvat 2071 saw the investors making token purchases on positive vibes induced by government reforms.

The benchmark S&P BSE 30-share Sensex resumed higher at 26,434.16 and traded between a high of 26,930.23 and low of 26,368.94 before concluding the week at 26,851.05, showing a surge of 742.52 points -- biggest gain in last ten week --, or 2.84 percent from last week close.

The Sensex had plunged by 981.89 points, or 3.62 pct, in last straight four weeks.

The broad-based 50-issue CNX Nifty of the NSE also rebounded by 234.85 points, or 3.02 percent, to finish the week to regain 8K-mark after one-month at 8,014.55.

Buying was witnessed across-the-spectrum as all 12 sectoral indices closed in the green with the capital goods, auto, power, metal, realty and consumer durables leading the pack. Mid-cap and Small-cap companies shares too were in keen demand from retail investors and their indices outperformed the Sensex.

"Participants were optimistic on hopes for additional reforms after Narendra Modi's party won elections in one state and emerged as single largest party in the other. In addition, measures taken by the government in the past couple of days, like deregulating diesel prices and raising the cost of natural gas also aided the sentiment," said Jayant Manglik, President-retail distribution, Religare Securities.

"We understand that the consumer buying has been good in the run-up to the festive season leading to buying of select stocks. Capital goods stocks performed well as they responded to the government actions related to coal block auctions," said Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.

Auto shares were also in demand on on expectations of higher sales on account of ongoing festive season and hopes diesel deregulation will fuel demand for vehicles.

Pramit Brahmbhatt, Veracity Group CEO, said," In the week, local equities closed strong, as speculation that the Europe will expand its economic stimulus and also the Japan's move to boost their local market through the pension funds has created positive sentiments in the global equity."

"Also the Prime Minister Narendra Modi's win in the two states elections has raised expectations for additional reforms. Going ahead later in the week U.S. Economic data will be announced, it will be interesting to see the market reaction as local markets will open on Monday," he added.

Overall, 27 scrips of the 30-share Sensex pack finished strong while only Infosys, Wipro and ITC ended with losses.

Major gainers were Axis Bank 5.45 pct, Bajaj Auto 7.23 pct, Bharti Airtel 3.67 pct, BHEL 5.96 pct, Cipla 5.78 pct, Dr Reddy's Lab 4.44 pct, GAIL India 7.31 pct, HDFC 3.51 pct, HDFC Bank 1.27 pct, Hero MotoCorp 8.34 pct, Hindalco 6.91 pct, HUL 4.30 pct, ICICI Bank 4.69 pct, L&T 7.37 pct, Maruti Suzuki 7.53 pct, NTPC 4.18 pct, ONGC 1.57 pct, RIL 1.58 pct, SBI 2.38 pct, SSLT 6.90 pct, Tata Motors 8.66 pct, Tata Power 2.98 pct, Tata Steel 2.51 pct and Sun Pharma 1.54 pct.

However, Infosys eased by 1.25 pct, ITC 0.96 pct and Wipro 0.89 pct.

Among the major gainers from S&P BSE sectoral indices, CG flared up by 6.29 pct, Auto 5.92 pct, Power 4.72 pct, Metal 4.19 pct, Realty 4.07 pct, CD 4.07 pct and HC 3.38 pct.

Reflecting rally in two-tier stocks, the BSE-Midcap and the BSE-Smallcap indices settled up by 4.32 pct and 3.38 pct respectively.

The total turnover at the BSE and the NSE was at Rs 9,788.78 crore and Rs 48,944.94 crore in the shortened week from Rs 11,983.54 crore and Rs 63,548.58 crore respectively, last weekend.