After a long Diwali break, the market saw 600 points rally in the Friday's opening trade and held the straight line on the graph throughout the session. Huge fresh longs build up took the market to near 3-month high.
The 30-share BSE Sensex climbed 515.97 points or 3%, to close at 17,804.80 and the 50-share NSE Nifty jumped 158.90 points or 3.05%, to end at 5,360.70 supported by 45 stocks.
Huge call buying was seen around 5400 and 5500 levels while put writing was seen around 5200 and 5300 levels. FIIs have bought equities worth Rs 2,166.21 crore today, as per provisional data available on NSE. However, DIIs have sold equities worth Rs 1,078.41 crore today.
The BSE benchmark Sensex rallied more than 6% this week led by two reasons - one is the finally much awaited bailout plan for the Eurozone got approved on Wednesday in the EU summit and the second is the likely pause in rate hikes from RBI in the next policy.
Investors have been optimistic on the Indian market since the RBI policy event. According to Portfolio Manager, PN Vijay, the RBI stunned everyone by making a rare promise that it may not raise interest rates in December, so that puts a base for the bulls to operate domestically.
"We have enough ammunition to take the Nifty probably to 5,600 in the next two months," he added. "India is still having a bit of catching up to do. The market is still down for the year as a whole whereas the Dow and the S&P have turned positive for 2011. So this catching up thing can probably take the market another 2-3% up."
Meanwehile, the Eurozone bailout plan caused the steep rally on Friday. European Union members agreed to raise the bailout fund to be about Euro 1 trillion and are also going to recapitalise banks. EU struck a deal with private lenders to accept a 50% on their Greek bonds.
Despite being the mood lifter for the markets today, experts are however, concerned about implementation of that plan.
Adrian Foster of Rabobank says the European Union's bailout fund has clear risk of implementation. He says, "With different governments involved at every stage, different political scenarios in each country and with coalitions, there is a challenge to implementation of these austerity measures."
Foster says, going forward, the market will find some negative headlines intermittently with the failure to implement the measures. European markets were flat, at the time of closing of Indian equities; they already priced in the event.
Back home, all sectoral indices closed in the green. The BSE Metal Index outperformed every sector, rallying 6.3% and Realty jumped 5.3%.
Bankex and Capital Goods Index rallied over 3.5%. Auto, Power and Oil & Gas indices gained 2-3%.
Hindalco has maintained its top position in the buying list, rising 11%. Tata Steel, JSPL and Sterlite Industries were up 6.5-9%.
ICICI Bank, Tata Motors, Jaiprakash Associates and DLF shot up 7-8%. From the capital goods space, L&T surged 4.6%.
Reliance Industries, L&T, HDFC, HDFC Bank, ONGC, TCS, SBI and BHEL rallied 2-3%.
However, BPCL plunged 3% after a 4% rally in crude oil prices. Maruti Suzuki fell 2% ahead of second quarter earnings.
Total traded turnover was more than 1.1 lakh crore. The market breadth was not so great; about 1702 shares advanced as against 1210 shares declined on BSE.
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Metals, banks, capital goods drive Nifty 150 pts higher
The NSE Nifty has sustained its morning gains owing to buying across sectors and positive global cues post the European Union agreement on the bailout plan. The 30-share BSE Sensex gained 506 points to 17,795 and the 50-share NSE Nifty moved up 157 points to 5,358 led by 43 stocks.
In the largecap space, Reliance Infrastructure, Hindalco and Sterlite Industries climbed 10-12%. Jaiprakash Associates, Jindal Steel and Tata Motors follow close, gaining 7-8%.
BPCL however fell 3% on the back of the rally in crude oil prices post the EU Summit. Maruti Suzuki too lost over 2% ahead of its numbers; a CNBC-TV18 poll sees a fall of 31.5% in net profit to Rs 410 as compared to the year-ago period for the company.
GAIL, Bharti Airtel and Ranbaxy Labs too were down.
SBI, L&T, Tata Steel, Jindal Steel, Tata Motors, Infosys, ICICI Bank, Axis Bank and Reliance Industries were the most active shares on the exchanges.
Meanwhile, Jai Corp, HOEC, Essar Ports, Bharat Forge and BF Utilities rallied 6.5-8% in the midcap space, while Shree Global, Kwality Dairy, MVL, TV18 Broadcast and Gitanjali Gems fell 2-5%.
Among smallcaps, Gokaldas Export, Jindal Cotex, Uttam Galva, Gabriel India and Money Matters jumped 11-14% whereas Chromatic India, Asian Star, AK Capital, Lloyds Metals and Kama Holdings slipped 6-12%.
At 13:52 hours IST : Sensex soars 500 pts; Maruti, BPCL underperformThe BSE benchmark gained 500 points on the back of strong support from metal, realty, banking, capital goods and oil & gas stocks.
Meanwhile, good global trend continued as the European markets climbed up after a flat start.
France's CAC, Germany's DAX and Britain's FTSE moved up 0.5-1%.
Back home, the 30-share BSE Sensex surged 510 points to 17,799, while the 50-share NSE Nifty traded 156.5 points up to 5,358.
According to Jitendra Panda of Future Capital, 5400 could act as a resistance point for the market. "We have seen huge rollover happening today. It is highest rollover for the calendar year and a lot of long positions got built up, even the shorts got rolled over. Today, the longs have made money, so some profit booking is happening and short covering has also been seen," he said.
Metals stocks continued to shine, the respective Index rising 6.6%. Sterlite Industries and Hindalco spiked over 10%. Tata Steel, Jindal Steel and SAIL jumped 6-8%.
The BSE Realty and Bankex grew 4% each. Capital Goods, Auto, Power and Oil & Gas rose 2-3%.
ICICI Bank, Jaiprakash Associates, Reliance Infrastructure, DLF and Tata Motors soared 6-7%.
ONGC, Reliance Industries, TCS, L&T, HDFC Bank, HDFC, SBI, BHEL and HUL gained 2-4%. However, BPCL (on rise in crude oil prices) and Maruti Suzuki (ahead of numbers tomorrow) fell 2.6% each.
The market breadth was not very strong; about 911 shares gained while 524 shares declined on BSE.
Among the broader indices, the BSE Midcap and Smallcap were up 1.4% and 0.9%, respectively.
At 12:37 hours IST : Mkt party continues; banks, cap goods, metals top winnersIndian equity benchmarks continue to trade with more than 2.5% gains led by sharp rally in major sectors like metals, capital goods and banks.
The 30-share BSE Sensex gained 433 points at 17,722 and the 50-share NSE Nifty moved up 132 points to 5,334.
The BSE Metal Index extended the rally as Tata Steel, JSPL, Hindalco and Sterlite Industries shot up 6-9%. The index jumped 5.7%.
In the largecap space, ICICI Bank and Jaiprakash Associates surged 5.8% each. DLF and L&T rallied over 4%.
Reliance Industries, HDFC, HDFC Bank, TCS, Infosys, SBI, ITC, ONGC, BHEL and HUL gained 1-3%. However, only Maruti and BPCL were under pressure.
But the market breadth was not quite strong; about two shares gained for every share falling.
The debt package that came out of the European Union meet this Wednesday, resulted in one of the strongest global market rallies recent times.
However, Mark Matthews of Julius Baer cautions that this package will only serve as a temporary sentiment booster and not a long-term solution.
