Sensex runs 283, highest since July 11; rate sensitives up

Moneycontrol Bureau

The 30-share BSE benchmark on Tuesday posted best gain in a day since July 11, rising nearly 283 points on further short covering in most beaten stocks-especially rate sensitives.
The Sensex closed at 19229.84, while the Nifty rose 86.90 points or 1.55 percent to finish at 5,699.30 after hitting an intraday high of 5704.75.
The broader markets too gained momentum with the BSE Midcap and Smallcap indices soaring one percent each. Advancing shares outnumbered declining ones by 1429 to 894 on the BSE.
Parag Thakkar, head of sales at HDFC Securities feels the current rally may be on hopes of monetary policy easing.
"The valuations of all domestic stories like banking, financials, infrastructure were totally beaten out of shape and there was a lot of short build up in the system. So, I think there is some bounce back based on the thing that now the government has taken these steps on gold and silver so rupee will stabilise and if rupee stabilises then Reserve Bank of India (RBI) will have a headroom to slightly loosen the monetary policy," he reasoned.
However, he does not expect that the rally is really sustainable at this point. "There are two things which the government could have done - one is curbing the imports of luxury items of gold & silver, and the bigger thing should be to boost exports. I think that steps should be coming and so IT & textile continue to be in good shape," he explained. Also Read - Investors remain bearish on EM equities: BofA ML Survey
The domestic currency held the 61-mark against the US dollar amid volatility today. It closed at 61.19, up 8 paise.
BSE Bankex, which lost 16 percent in past three weeks, gained 3 percent with the Axis Bank rising the most (7 percent gains). Top private sector lenders ICICI Bank and HDFC Bank surged 3 percent each while State Bank of India rebounded with 1 percent gains.
Realty Index jumped 4.5 percent followed by Power and Auto with 2 percent gains each.
Ranbaxy Labs topped the buying list among Nifty 50 stocks, soaring 8.5 percent while Sun Pharma added another one percent post earnings.
Housing finance major HDFC and software services exporter Infosys rose nearly 3 percent. Shares of commercial vehicle major Tata Motors zoomed 3.6 percent.
Mahindra & Mahindra closed off day's high post earnings, up 1.25 percent (as against intraday rally of nearly 4 percent). It reported a higher-than-expected 29 percent growth year-on-year in its net profit of Rs 938 crore during April-June quarter, largely driven by other income and tractor business.
However, Hindalco Industries dropped 2.5 percent on lower-than-expected Q1 earnings. Profit after tax was up by 11.6 percent year-on-year to Rs 474 crore on higher other income.
ONGC shares fell one percent on poor realisations in first quarter.
Tech Mahindra closed at nearly 6-year high of Rs 1,329.05, up 5 percent over previous close after Q1 earnings.