BSE Sensex soars 520 pts on gas price hike, global cues
The rally was broadbased, partly led by short covering, sharp recovery in rupee from its record closing low of 60.71 per dollar and Fed‘s comments on bond buying programme.
June 28, 2013 / 18:33 IST
Moneycontrol Bureau
It was a spectacular start of the July series with the equity benchmarks rising 2.8 percent Friday on government’s initiative of hiking gas price hike and setting up of a coal regulator. The rally was broadbased, partly led by short covering, sharp recovery in rupee from its record closing low of 60.71 per dollar and Fed’s comments on bond buying programme.Benchmarks saw biggest gains for the first time since March 1, 2011. The 30-share BSE benchmark rallied more than 800 points in two consecutive sessions. The Sensex touched an intraday high of 19432.94, before closing at 19395.81, up 519.86 points. The 50-share NSE Nifty rallied 159.85 points to finish at 5842.20.For the week, both benchmarks jumped over 3 percent while the midcap closed with marginal gains.Nilesh Shah of Axis Direct feels the market is going to remain highly polarised. He says one will have to be far more stock specific than broad market oriented. "This whole divergence between the midcaps, small caps and the large caps between the consumer, pharmaceuticals versus real estate, power, infrastructure, it is going to keep on creating a churn and volatility in the market and one will have to be extremely stock specific," Shah adds.Metal, power, capital goods, oil & gas, auto and bank sectors rallied between 3 percent and 4.7 percent.Shares of state-owned ONGC rallied 10 percent in early trade on gas price hike, but the profit booking and uncertainty over subsidy sharing erased more than half of gains later on. The stock closed with 3 percent gains while its rival Reliance Industries gained 3.8 percent. In fact the oil & gas space gained for the second consecutive day today.Coal India shares climbed 5.6 percent after finance minister P Chidambaram said that the government will issue an Executive Order to immediately set up coal regulator.Power and fertiliser companies were nervous in early trade as reports suggested gas price hike would hit these companies by Rs 14000 crore. However, finance minister P Chidambaram, addressing the media, clarified that the government has only fixed output prices for gas and input prices for power and fertiliser will be fixed later.Meanwhile, Jindal Steel, BHEL, BPCL, Reliance Infrastructure, Tata Power and Sterlite Industries were the top gainers, rising 5-8 percent.YES Bank gained 4 percent after the Cabinet Committee on Economic Affairs approved recommendations of Foreign Investment Promotion Board on bank's Rs 2,650 crore QIP issue and increase of foreign equity in the bank to 60 percent.On the losing side was HCL Technologies (down 2.44 percent) as the country's fourth largest software services exporter is likely to lay off 250 employees in Finland, reports CNBC-TV18 quoting sources. Ranbaxy Labs and HUL lost 2.7 percent and 0.67 percent, respectively.Among the midcaps, IFCI soared close to 18 percent on banking license hopes while Gitanjali Gems was locked at lower circuit for the whole week, losing more than 50 percent.Nearly two shares advanced for one share advancing on the Bombay Stock Exchange. The BSE Midcap Index was up 2.26 percent and Smallcap gained 1.4 percent from the previous close.On the Indian currency front, the recovery was quite sharp for the second day following jump in equity markets. The rupee gained 80 paise to 59.39 per dollar today as against previous day’s closing of 60.19. The currency had hit its record low of 60.76 and all-time closing low of 60.71 per dollar on Wednesday.Ashutosh Raina of HDFC Bank sees the rupee stabilising at 59 against the dollar for sometime now.Going ahead, the rupee is likely to be range bound between 58-61/USD as rollback of stimulus by US Fed will happen sooner or later, he said.Foreign institutional investors (FIIs) were net buyers for the first time since June 11 as they have bought more than Rs 1,100 crore worth of equity shares today, as per provisional data available on the NSE. FIIs sold more than Rs 12,100 crore worth of shares in 13 consecutive sessions since June 11.Globally, Asian markets saw 1-3.5 percent gains at close after three US Federal Reserve officials sought to downplay market fears that the central bank would soon ease its unprecedented bond-buying stimulus programme known as quantitative easing or QE.Japan’s Nikkei outperformed its global peers with 3.5 percent gains while China’s Shanghai snapped 4-day losing streak, gaining 1.5 percent. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
