Markets buoyant, Sensex up 744 points

Mumbai: Signalling recovery in stock markets, benchmark Sensex on Friday surged by over 733 points to extend the gains for the third straight day, mainly aided by continuous fall in inflation and anticipation of rate cut by RBI.

The 30-share bellwether index on the Bombay Stock Exchange concluded the day at 9,788.06, a sharp rise of 743.55 points, or 8.22 per cent After opening on a strong note, the key index surged by 825 points during intra-day but pares some of its gains to end the day lower than the high seen during the day.

Broad-based Nifty on the National Stock Exchange also shot up by 188.55 points or 6.99 per cent to 2,885.60.

Marketmen said slew of favourable factors boosted investor sentiment which was at its lowest ebb after sustained heavy selling which saw the barometer plunging to below 8,000 level last week.

Analysts said today’s impressive rally can be construed as recovery after relentless selling for about a month in tune with weak trends in bourses across the world. Markets had fallen by a massive 23 per cent this month.

Brokers said besides a fall in inflation to below 11 per cent, anticipation of rate cut by the central bank revived investors interest in buying as they feel that both lower lending and inflation rates bode well economic growth.

Inflation has come down to 10.68 per cent for mid-October. Besides, US central bank Federal Reserve and the Bank of Japan have massively cut rates, prompting many to believe that RBI will follow suit.

Rating agency Standard & Poor’s reaffirming stable outlook for India also intensified buying support, they said.

Wall Street also ended yesterday on a positive note shrugging off decline economic growth. Experts said fall in GDP growth was less than expected and investors heaved a sigh of relief which was mirrored in domestic bourses as well. Domestic funds and retail investors also joined the party as many a blue-chip stock is now available at attractive prices.

Meanwhile, Finance Minister P Chidambaram today said the economy is poised for the other way, taking strong exception to industry chamber Assocham’s forecast that a quarter of people in certain sectors will lose jobs in the next 10 days.

Among index-based shares, M&M was by far the top gainer at 23.09 per cent. HDFC was the next best at 17.48 per cent. Jaipra Asso rose by 16.55 per cent, ICICI Bank by 15.50 per cent and Sterlite Ind 14.48 per cent. Heaviet of them all, RIL was up 13.81 per cent.

The trading volume was relatively up at Rs 3,717.17 crore from Rs 3,104.10 crore on Wednesday. RIL continued to be the top traded share with the highest turnover of Rs 435.83 crore followed by Reliance Capital (Rs 186.93 crore), ICICI Bank (Rs 170.58 crore), SBI (Rs 148.39 crore) and Reliance Com (Rs 135.61 crore).

Total market breadth was positive with 1,577 counters registering gains against 916 losers.

Sectorial indices gained in the range of 2.25 per cent to 10.20 per cent. The BSE-Metal index zoomed by 496.73 points or 10.20 per cent, the BSE-Oil&Gas by 517.29 points or 9.11 per cent, the Bankex by 336.90 points or 7.21 per cent and the BSE-Auto by 161.22 points or 6.39 per cent.