Market closes at 3-year high, Sensex up 467 pts; banks lead

Moneycontrol Bureau

The market staged a spectacular performance on last day of the week, rallying more than 2 percent to close near three-year high, driven by foreign money.

The Sensex jumped 517 points intraday, before closing at 20882.89-highest level since November 10, 2010, up 467.38 points from previous close on broadbased buying and short covering.

The Nifty was up 143.50 points or 2.37 percent to end at 6189.35-highest level since November 11, 2010, after hitting an intraday high of 6201.45.

Clearly expectations from the political front seem to be the critical driver of the market these days, says Pramod Gubbi of Ambit Capital.

“From the political angle, it becomes clear that the market favourite BJP is inching up in terms of its stallion, likely to form the government. Besides that fundamentally, there are absolutely no triggers on the economic data front. We are looking at a further tightening from RBI. So this sort of a rally in banks and rate sensitives is fundamentally not so well narrated in our view,” Gubbi elaborated.

For the week, the Nifty gained 1.5 percent and Sensex rose 1.7 percent.

Stock specifically, banks were on fire today with the BSE Bank Index rising 4 percent. ICICI Bank, which is going to declare second quarter numbers next week, rallied 4.44 percent. HDFC Bank surged 3.5 percent and State Bank of India gained 2.7 percent on the BSE.

Index heavyweights Reliance Industries, ITC and HDFC spiked 2.5-3 percent. Mukesh Ambani, in his meeting with oil minister Veerappa Moily, today reassured about his investment of USD 8-10 billion in India.

Sesa Sterlite was the top gainer in the Sensex, rising 6 percent. UBS initiated its coverage on the stock with a buy rating and a target price of Rs 220 per share. The brokerage house expects strong volume growth in the power segment coupled with additional aluminum capacity coming on-stream and potential freeing of the existing mining ban in Goa.

Tata Steel rallied nearly 6 percent followed by Hindalco with 3 percent gains.

Capital Goods Index spiked 3 percent, led by Larsen & Toubro that soared 4 percent ahead of second quarter numbers. Engineering and construction major declared its numbers after market hours. Net profit fell lower-than-expected 14 percent year-on-year to Rs 978 crore as against analysts’ expectations of Rs 890 crore amid weak macro-economic environment.

However, Bajaj Auto was the only loser among largecaps, falling 0.56 percent. CLSA has downgraded the two-wheeler maker to sell from underperform despite better-than-expected July-September results, saying profit margins should weaken in the second half of the fiscal year as product-mix worsens and input cost pressures rise, reports Reuters.

Foreign institutional investors today have bought Rs 1,753 crore worth of equity shares, as per provisional data available on NSE website.

Meanwhile, the rupee closed lower by 4 paise at 61.27 per dollar, after hitting an intraday high of 60.94 to the dollar.

Globally, Asian markets barring Nikkei closed higher as China's third quarter GDP growth came in higher at 7.8 percent as against 7.5 percent in Q2. European markets touched fresh five-year highs on broadbased rally on account of China data.