Sensex up 450 pts, Nifty hits 5700; SP supports Congress

The 30-share BSE Sensex rallied 450 points and the 50-share NSE Nifty hit 5700 level today as the government stood strong with support by Mulayam Singh Yadav's Samajwadi Party .

Samajwadi Party chief Mulayam Singh Yadav said his party would support United Progressive Alliance from the outside.

Experts feel this is the major trigger for the market as the government will move further with their other reforms like insurance in FDI, land acquisition bill etc. The market fell more than 200 points in previous two sessions after the Trinamool Congress chief Mamata Banerjee had withdrawn support over FDI approval in retail sector and hike in diesel price by Rs 5 per litre.

Though the SP supported Congress from outside, Mulayam said his party would continue to oppose FDI in retail sector as he sees 5 crore people getting unemployed due to retail FDI

The BSE benchmark shot up 460 points to 18,809 and the NSE benchmark jumped 146 points to 5700. Even the Indian rupee appreciated sharply, rising 69 paise to 53.69 against the US dollar.

Finance Minister P Chidambaram has approved Rajiv Gandhi Equity Savings Scheme. He also announced lower tax on foreign borrowings by local companies. "Tax will be cut to 5% from 20% and withholding tax liability on Indian companies reduced to 5%," Finance Minister said.

The BSE Bankex spiked 4% while Power and Capital Goods indices were up 3% each. Metals, Realty, PSU and FMCG indices gained 2%.

Country's largest private sector lender ICICI Bank shot up over 5.5% while its rival State Bank of India rallied 5%. HDFC Bank was up 2.5%.

Telecom operator Reliance Communications rose nearly 4% as the company increased base tariff by 25% to 1.5 paise from 1.2 paise. Bharti Airtel jumped 3%.

Engineering conglomerate L&T, cigarette major ITC, index heavyweight Reliance Industries, housing finance company HDFC and state-run oil & gas producer ONGC were up 2-3%.

Utility vehicle maker Mahindra & Mahindra and power equipment maker BHEL surged 4% each.