Moneycontrol Bureau
It was a strong start to the May series on Monday as the short covering helped the benchmark indices rally nearly 2 percent after seeing almost 7 percent loss in previous three weeks.
The 30-share BSE Sensex climbed 479.28 points or 1.77 percent to 27490.59 and the Nifty reclaimed 8300, up 150.45 points or 1.84 percent to close at 8331.95.
Today’s rally was entirely based on short covering, which may continue for a while, feel experts. According to them, the weak earnings expectations, weak monsoon and MAT concerns already priced in.
CLSA increased its India weightage by a percent, fueling hope that FII outflows are nearing their end.
Meanwhile, Nomura believes that India is best emerging market turnaround story and sees the pullback as a good opportunity to buy. The brokerage expects India's GDP growth to overtake China over next year.
The broader markets also rallied in tandem with benchmarks. The BSE Midcap gained 1.3 percent and Smallcap surged 2 percent. The market breadth was strong as 1956 shares advanced against 835 shares declined on the BSE.
All sectoral indices saw buying interest today.
There were big moves in retail sector. Kishore Biyani's Future Group bought Bharti's retail operations for Rs 500 crore in all stock deal. The merger will result in amalgamation of 570 retail stores across 243 cities. Future Retail surged 12 percent.
The market gave thumbs up to the Aditya Birla Group's move to consolidate its retail business. Pantaloons Fashtion locked in 20 percent upper circuit and Aditya Birla Nuvo gained over 12.6 percent after AB Nuvo, Pantaloons and Madura Garments boards approved consolidation last weekend. Kumar Mangalam Birla said the retail business consolidation was a huge value creating opportunity for shareholders.
Auto stocks too were in top gear as the fiscal has started off on a strong note with sales growth across original equipment manufacturers picking up in April. Maruti Suzuki, which registered a solid 30 percent growth in sales, gained 0.7 percent while Bajaj Auto, which saw rise in sales for the first time in 4 months, rallied 7.4 percent. Mahindra and Mahindra rallied 4.7 percent as its degrowth has been arrested in April and strong sales growth continued for Ashok Leyland.
Tata Motors lost 0.5 percent as its commercial vehicle (CV) sales continued to fall, though the recovery in passenger vehicle sales continued due to good response to new launches Bolt and Zest.
State-run oil explorer ONGC topped the buying list on Sensex, up 7.6 percent as finance ministry official over the weekend said the government will bear entire fuel subsidy from now and upstream oil companies will not have to share fuel subsidies anymore. Oil India surged 6 percent.
Among others, shares of HDFC, Infosys, Reliance Industries, ITC, SBI, Bharti Airtel, Dr Reddy’s Labs, BHEL, Hindalco and Hero Motocorp gained 2-3 percent while ICICI Bank and L&T closed marginally lower.
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