Sensex recovers smartly by 507.19 points

Mumbai, Nov 4 : The Sensex of the Bombay Stock Exchange, after snapping a six-session losing streak, today bounced back smartly by 507.19 points to settle firm at 15,912.13 on the back of institutional buying in heavyweights, short coverings and positive global cues.

The Nifty index of National Stock Exchange (NSE) also recouped by 146.90 points to close higher at 4710.80.

Strong buying demand in battered index pivotals, after the six session slide, triggered a solid rally on the bourses in late trade.

Weakness in US dollar against major rivals and firm global stocks laid a solid platform for today's rally. Comments by Finance Minister Pranab Mukherjee yesterday that there were no immediate plans to place curbs on capital inflows, also boosted sentiment.

With short-term interest rates very low, global traders have turned to borrowing funds cheaply in the US and then reinvesting the proceeds in equities and commodities, looking to lock in higher returns and benefiting from further erosion in the dollar.

The rally on the bourses was broad-based with all sectoral indices on BSE logging gains. Heavyweight stocks Reliance Industries, ICICI Bank, Bharti Airtel, ONGC and Infosys spurted. Realty, metal and banking shares were at the forefront of the rally. Auto stocks gained riding on the back of robust monthly sales for October 2009.

But telecom pivotals pared early gains.

The market breadth was strong. A bout of volatility was witnessed in early trade. After an initial surge, triggered by higher Asian stocks, the market soon pared gains and soared in mid-morning trade after a report showed that business activity among services companies in India climbed to its highest level in more than year in October 2009 as new work orders, activity and employment expanded at faster rates. The market moved up in afternoon trade and extended gains in mid-afternoon trade with the Sensex hitting a fresh intraday high.

The market extended rally in late trade.

Trade Minister Anand Sharma today said exports may start growing in annual terms from the March 2010 quarter and the government would continue to provide support to ailing sectors. The economy is expected to expand by 6.3 per cent in the year to March 2010, the Planning Commission said in a report. The plan panel expects wholesale price inflation to go beyond 4-5 per cent by end of March 2010. The business expectations sub-index recorded its fastest expansion since March 2008, at 79.47 per cent in October 2009, compared with 74.82 in September 2009.

European markets rose today as investors braced for the Federal Reserve's statement on interest rates and the economy. Key benchmark indices in Germany, France and UK were up by between 0.63 per cent and 1.37 pc. Asian stocks rose today led by banks and mining companies, as Korea Exchange Bank reported better-than-estimated profit and gold prices climbed to a record high. Key benchmark indices in Japan, China, Hong Kong, Singapore, South Korea, and Taiwan were up by between 0.42 pc and 1.76 pc.

The Sensex opened 83.03 points higher at 15,487.97, also the day's low. The Sensex rose 524.15 points at the day's high of 15,929.09 in late trade. The S&P CNX Nifty resumed firm at 4567.30 points and then it recorded the day's high and low at 4717.80 and 4565.00 points respectively. The market breadth was strong.

On BSE, 1791 shares advanced as compared with 983 that declined. A total of 58 shares remained unchanged.

The total turnover on BSE amounted to Rs 5120 crore as compared with Rs 3885 crore on previous day. Among the 30-member Sensex pack, 27 gained while only 3 of them slipped. Grasim (down 0.49%), and Sun Pharmaceuticals (down 0.79 per cent), edged lower from the Sensex pack.

--UNI

(c) 2009 Published with permission from United News of India.
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