The Bombay Stock Exchange rose more than 1 percent today as improved US jobs data sparked a global risk rally, while private lenders such as HDFC Bank surged on hopes for government measures to help the mutual fund sector. Inflow of foreign money too helped Indian equities as the Indian rupee appreciated by 30 paise to 55.45 against the US dollar.
The Sensex closes 1.25 percent higher at 17412.96, while the NSE Nifty was up 1.28% to 5,282.55, the highest close since July 11.
Morgan Stanley also added to the bullish sentiment after it said that Indian stocks are exhibiting early signs of a bull market.
The broader markets underperformed the large caps with the BSE Small Cap index up 0.8% and BSE Mid Cap index gaining 0.5%.
The US investment bank believes three conditions will be critical: a bullish steepening of the Indian yield curve, expanding profit margins and attractive valuations.Of these, Morgan Stanley says the spread between the 10-year bond yield and the 91-day treasury-bill is already reversing its steep inversion, while it sees stock valuations as “attractive.”
Rock solid-gains in Oil & Gas and rate sensitive -Auto and Bankex- counters, got the markets going. However, last minute profit booking in select stocks dragged the benchmarks a little lower.
RIL, Tata Motors, JP Associates, GAIL, Kotak Mahindra Bank, Axis Bank, DLF, HDFC Bank, R Infra, Bajaj Auto, Tata Steel, BHEL, Sterlite Inds, L&T, Sun Pharma, ICICI Bank, and HDFC were among the notable leaders on the Sensex and the Nifty.
BPCL, Wipro, Dr.Reddy’s Labs and TCS were the notable losers on both the indexes.
However, Index heavyweight Reliance Industries hogged the limelight today and was the biggest index mover, rising 5.7 percent due to sharp rally in crude. WTI crude gained 4.9 percent on Friday to $91.4 a barrel on jobs data and tropical storm Ernesto in Gulf of Mexico. The rise could also be because the Eonomic Times reported the energy conglomerate has agreed to share its accounts for its KG-D6 block with the government, raising hopes for an end to the stand-off between the two sides over the natural gas fields.
Private banks such as ICICI Bank and HDFC Bank held their earlier gains after Finance Minister Palaniappan Chidambaram said the government would unveil policies to attract investments in mutual funds.
Chidambaram also chalked a definite plan to beat inflation, boost economy and attract foreign investment to the Indian shores. Addressing media for the first time after taking over the finance ministry, Chidambaram said that the government is expecting to raise investment level to 38.5% of gross domestic product (GDP).
Pharma stocks extended their recent uptrend, with Sun Pharmaceuticals Industries and Wockhardt hitting record highs. Pharma firm Wockhardt shot over 4% on reporting 94.87% rise in consolidated net profit at Rs 377.97 crore for the first quarter ended June 30, 2012 on account of robust performance of US and EU operations.
Steel producers Sterlite Industries and Tata Steel gained more than 1.8%. India’s largest software services exporter TCS went down 0.7% ahead of Cognizant numbers that were announced after market hours.
Realty major DLF climbed 1.8% ahead of numbers that will be announced today in evening. Analysts on an average expect the profit after tax to go down by 14.5% year-on-year to Rs 290 crore during the quarter.
