Mkts celebrate Fed rate cut: Sensex closes above 16k

It was a phenomenal session for equity markets across the globe giving some blow out moves. Markets saw an emphatic breakout celebrating the rate cut of 50 bps in the discount rate by the Fed chief Ben Bernanke. This rate cut comes after four years on account of recession concerns in the US. During the last four years there have been 17 consecutive rate hikes and yesterday we saw a rate cut of 50 bps. Analysts are seeing this as positive and a bold move by the Fed in order to take charge of the slowdown in US.

It was a historic session for Sensex, which was up 4% or 600 points breaching 16,000 and staying well above outperforming most of the Asian peers. It was the biggest single day points gain for Sensex. The euphoria was wide spread in scrips across sectors. Sugar was the story of the day. After a long time sugar rallied with some of sugar stocks locked in upper circuit on sops being given to sugar companies.

Rate sensitive were also among the star performers whether it was banking, property or auto.

Banking & financial stocks like HDFC and HDFC Bank saw big moves and were up 8% followed by ICICI Bank and SBI. Giving them company from the realty space were DLF, Unitech, HDIL.

Stocks like SBI, SAIL, Reliance, RPL, HDFC, BHEL and Tata Steel hit their life time highs. Reliance market cap hit Rs 3 lakh crore.

Sensex was up 653.63 points or 4.17% at 16322.75, and the Nifty up 186.15 points or 4.09% at 4732.35.

About 1643 shares have advanced, 1301 shares declined, and 86 shares are unchanged.

The BSE Midcap Index ended at 7,116.61 up 132 points or 1.9%.

The BSE Smallcap Index ended at 8,871.00 up 90 points or 1%.

The BSE Capital Goods Index was closed at 14,112.99 up 2%. Triveni Engg, Praj Industries, Lakshmi Machine, Reliance Infra, Carborundum, Bharat Bijlee, Thermax closed higher.

The BSE Auto Index closed closed at 5,094.31 up 3.5%.  Maruti Udyog, Bajaj Auto, Mah and Mah, Hero Honda, Tata Motors ended in the green.

The BSE Metal Index closed at 12,546.34 up 4%.  SAIL, Sterlite Ind, Tata Steel, Hindalco, JSW Steel, Hind Zinc
 advanced.

The BSE FMCG Index gained 2% at 2,140.91. ITC, HUL, Britannia,  Marico, Colgate, Tata Tea ended higher.

BSE Oil and Gas Index closed at 8,924.11 up 5%.  Reliance Petro, Reliance Natura, GAIL, Reliance closed in green.

The BSE IT Index closed at 4,491.21 up 2.4%. Infosys, Tech Mahindra, Mphasis, I-Flex Solution, HCL Tech, Satyam, Patni Computer closed higher.

The BSE Bankex was up 5% at 8,691.45. HDFC Bank, Bank of Baroda, ICICI Bank, PNB, SBI  closed higher.

The NSE cash turnover was at Rs 16470.54 crore and the NSE F&O turnover was at Rs 68643.65 crore. The BSE cash turnover was Rs 7455.94 crore. Total market wide turnover was at Rs 92570.13 crore.

Anil Manghnani of Modern Shares & Stock Brokers said that he had thought that the markets would make new highs, but he could never have imagined that the markets would make a new high in September. He believes that the 600-points rally was a welcome surprise and the Fed announcement was the factor that gave a boost to all global markets. According to him, it throws out the decoupling theory for sometime.

Sanjay Sinha, CIO, SBI Mutual Fund, said feels the markets will remain in the 16,000 territory for some more time. He praises the Fed for an honest admission of problems in the US and for aggressively cutting rates by 50 basis points.

He observed that if one goes by historical examples, as to how the Sensex behaved every time it crossed a milestone number, the vigor has been fast on, every time. There was positive news, which catapulted us to this level.

16K SNAPSHOT

• Sensex moves from 15000-16000 in 53 days
• BSE Small-cap Index has outperformed Sensex, Nifty in 15-16K
• Sensex up 6.6%, BSE Small-cap Index up 10.6%, CNX Mid-cap Index up 6.8%
• BSE FMCG Index up 11.7%, BSE Metal Index up 10.8%
• BSE Oil & Gas Index up 10.5%, BSE Cap Goods Index up 8.5%
• BSE IT Index down 11.3%, BSE Healthcare Index down 5%

Fund Flows

• Since July 6, 2007
• MFs: + $ 783 mn
• FIIs (cash): + $ 3.06 bn
• FIIs (FNO): + $ 1.26 bn
• FIIs (Net): + $ 4.32 bn

• 9-10K: 49 days
• 10-11K: 30 days
• 11-12K: 20 days
• 12-13K: 136 days
• 13-14K: 27 days
• 14-15K: 144 days
• 15-16: 53 days

• Oil & Gas: RIL up 20%; IPCL up 20%
• FMCG stocks: ITC up 16.5%, HUL up 10%
• Metal stocks: SAIL up 30%, Tata Steel up 12.5%,
• Capital Goods Index: BHEL up 23%, L&T up 11%, ABB up 10%

• Tech Stocks: TCS down 14%, Wipro, Satyam down 13%, Infosys down 8%
• Pharma Stocks: Cipla down 22%, GSK Pharma down 7%
• Telecom Stocks: VSNL down 17%, Bharti down 3%, MTNL down 9%

• Auto Stocks: Bajaj Auto up 13%, MUL up 10%, M&M down 10%, Tata Motors down 6%
• Bank Stocks: HDFC Bank up 7%, ICICI Bank down 4%, SBI down 3%

Reliance Energy up 56%, Tata Power up 11%

• 16, 000 - Sep 19, 2007
• 15,000 - July 6, 07: 15000
• 14,000 - Dec 5, 2006
• 13,000 - Oct 30, 2006
• 12,000 - Apr 20, 2006
• 11,000 - Mar 21, 2006
• 10,000 - Feb 6, 2006
• 9,000 - Nov 28, 2005
• 8,000 - Sep 8, 2005
• 7,000 - June 20t, 2005
• 6,000 - Feb 11, 2000
• 5,000 - Oct 8, 1999
• 10-16K
• Sensex up 60%, Nifty up 54%, CNX Midcap Index up 48%, BSE Small-cap Index up 43%
• Sectoral Indices 10-16K (%)
• B S E Capital Goods Index 93.22
• B S E Oil & Gas Index 87.17
• B S E Metal Index 67.01
• B S E Bankex 61.16
• B S E Fmcg Index 19.42
• B S E IT Index 18.60
• B S E Auto Index 7.62
• B S E Healthcare Index 5.37