Sensex posts biggest single-day gain in a month, ends 450 points higher

3:30 pm: The BSE Sensex today loggedits biggest gain in a month, rising 453 points to provisionally close at 20,853 while the NSE Nifty rose130 points to end at 6189, led by banks and metals.

Today’s rally was fuelled by easing fears on US Fed’s quantitative easing. There isrenewed optimism that the US Federal Reserve may continue its $85-billion-a-month bond buying programme as the US economy and labour market are both performing far short of their potential, and that recovery needs to be stronger before the US Fed will reduce QE.

“Coming on the back of a rally on Thursday, the Indian markets continued to trade firm -supported by global cues. That the stimulus measures (QE3) may not be rolled back any time soon is what is driving the risk on rally in equity markets. Implied in this expectation is that foreign capital flows would continue. Markets are now looking forward to further clues from Bernanke as he speaks tomorrow and later on details of the FOMC meet in October would be made public. Plus, the jobless claims data is expected later in the week, which would throw light on the strength of the job market.

Over the weekend, the inflation data came in at 7.0%, which showed an increase over the previous month. Vegetable prices have been one of the prime drivers of inflation led by onion prices. Recent reports suggest that onion prices have corrected at some of the major centers, which should provide a major relief to consumers and policymakers alike. With the results season coming to an end, the market would be sensitive to developments on global front and election outcomes in the four states,” saidfrom Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.

The Indian currency recovered below the 63 level today with the rupee rising to 62.41 vs previous close of 63.11.

Top Sensex gainers include HDFC bank, up 3.8 percent, L&T up 4.2 percent and ITC up 3.7 percent.

BSE capital goods index gained 3.4 percent, while the banking index was up 3.2 percent. FMCG index rose 2.5 percent and the realty index rose 2.5 percent too.

Meanwhile, in a report titled Asiamaxima, CLSA’s Chris Wood has said “The Indian stock market’s greatest hope in this respect was the confirmation in September of Gujarat Chief Minister Narender Modi as BJP’s prime ministerial candidate for general elections, which has to be held by May next year.”

While the odds are stacked against him in terms of BJP’s seemingly limited national appeal, the worse the sense of crisis the better Modi’s chance of winning. This is because of his track record of successful economic management in Gujarat during 12 years as chief minister.

Market at day’s high

3:06 pm The BSE Sensex is now trading over 450 points and has gained the most today in since October 18 in percentage terms, while NSE Nifty is trading at a one-week high, with all indices in the green.

The Indian rupee also gained to touch 62.40 against the USD.The Indian currency led gains among emerging Asian currencies on Monday as investors cut bearish bets on regional units, with the dollar softer amid uncertainty over how long the U.S. Federal Reserve will keep up its policy stimulus.

The rupee rose nearly 1 percent on demand from foreign banks.

Today’s rally is fuelled by easing fears on US Fed’s quantitative easing. There isrenewed optimism that the US Federal Reserve may continue its $85-billion-a-month bond buying programme as the US economy and labour market are both performing far short of their potential, and that recovery needs to be stronger before the US Fed will reduce QE.

Also adding to the sentiment was the RBI’s renewed resolveto tame inflation and check the rupee’s slide against the US dollar.

Market at day’s high; Sensex up nearly 400 points

2:30 pm The Indian markets are trading at the day’s high with the BSE Sensex up 390 points at 20788 and the Nifty up 112 points at 6168.

Stocks boosting Sensex include ITC up 3.3 percent, HDFC Bank up 3.8 percent and RIL up 2.13 percent.

Tata Steel shares rose 2 percent adding to Thursday’s 4.9 percent gain after the company’s second-quarter profit beat expectations, helped by a rise in prices and market share at home.July-September consolidated net profit, after minority interest and share of associates, was Rs 917 crore, compared with a loss of Rs 364 crore a year earlier, Tata Steel said on Wednesday.

Irrespective of where the Sensex or the Nifty is headed, the approach should be bottom up, says Sanjay Dutt, Director, Quantum Securities. He feels much of the action will now shift to midcap stocks.

In an interview with CNBC-TV18, Dutt advises investors to concentrate on stocks that are likely to benefit from changes in the economy.

Beaten down cyclicals like banking, metals and select auto could regain favour with the street on the growing view that the worst may be over for the economy, he said. He expects the Nifty to consolidate in the 6000-6250 range in the near term.

Sensex gains 350 pts; UBS downgrades India to ’neutral’

At 1. 00 pm,The market is trading at one-week high. The Sensex is up 340.65 points or 1.67 percentat 20740.07, and the Nifty is up 94.55 points or 1.56 percentat 6150.70.

ITC , HDFC Bank , ICICI Bank , L&T, ONGC , Tata Steel and Reliance Industries are the biggest gainers, rising 2.3 percent. However, Sesa Sterlite, Bajaj Auto , Cipla , Tata Power and Coal India lost between 0.4-0.8 percent.

10:15 am The market has kick started the week on a strong note as Asian markets surged higher taking cues from the Wall Street as market mood turned bullish on hopes that the US Federal Reserve will continue with its quantitative easing program.

At 10:15 am, the Sensex was up 290 points at 20692 led by gains in banks, realty, technology and capital goods stocks while Nifty was up 84 points at 6150.

Meanwhile, UBS has downgraded India to neutral but upgraded China tooverweight’ on the bet that the dragon country is due for a re-rating.

“We still like India, at the micro level a lot. But it is by nature a longer-term story, not an overnight sensation,” says the UBS note. “A re-rating on the other hand of China over the coming weeks is likely to make India pale by comparison. India is not likely to get much benefit from a China move-albeit more flows to emerging market equities might help if the China story attracts broader capital back to EM,” the note said.

9:30 am Sensex jumps 250 points, Nifty above 6100, banks lead gains

Indian markets were off to a great start this morning on positive global cues. While BSE Sensex jumped 250 points at 20655, was Nifty up 75 points at 6130. Even the Indian rupee strengthened to 62.85 against the US dollar.

Asian markets are higher in the hope of economic reforms in China and an extended stimulus in the US. Federal Reserve Chairman Ben Bernanke will speak on “Communication and Monetary Policy” tomorrow. On Wednesday, the US central bank will release minutes from its October policy meeting. Janet Yellen, who send the markets higher last week seems to be in no rush to taper.

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With the July-September quarterlyearnings season coming to an end, the focus will now shift toglobal cues which will determine the near-term trend for thedomestic bourses, say analysts.Besides, markets will monitor the investment trend byforeign institutional investors (FIIs) and movement of rupeeagainst the US dollar.The government and the Reserve Bank of India (RBI)’s efforts to talk up the markets may also aid sentiment.

" “IIP numbers and inflation figures have failed to give any cheer this time. So, global cues and currency movement in near term may direct Nifty trend,” said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio Limited.

Foreign investors have poured inover Rs 4,000 crore in the equity market so far this monthamid renewed optimism about the Indian economy, and delaying

of US Fed’s tapering of its monetary stimulus to shore up theAmerican economy.

Total foreign investment in the stock market has reachedRs 92,936 crore ($16.8 billion) so far in 2013, as per thedata from Securities and Exchange Board of India, the capitalmarket regulator.

“Indian markets will likely find support at levels of 5,900-6,000, which was the top-end of range of 2013. However, near-term trends will still remain range-bound, till the time we see clarity on any growth revival in Q1 CY14 or election results in Q2 CY14,” said Rajat Rajgarhia, Director Research, Motilal Oswal Financial Services Ltd.

BSE healthcare index is the worst sectoral performer this morning, trading up 0.4 percent while BSE bankex started the day at the top of the sectoral pack with gains of 2.3 percent. Other defensives like IT and pharma were also strong this morning.

Top Sensex gainers: HDFC Bank is up 2.8 percent, SBI is up 2 percent, L&T gained 1.7 percent. All BSE indices are in the green; realty index up 1.6 percent.

Shankar Sharma of First Global feels India is still in a bear market, and the upcoming general elections will weigh on sentiment.

“It doesn’t take a rocket scientist to figure that the rally has been extremely narrow, driven by a handful of stocks and sectors, and that almost never portends good things out into the future,” he said in an interview with CNBC-TV18.

He said the fundamental picture now is much better than that in June-July, and that India has now broken free from the camp of peers like South Africa, Indonesia and Brazil. He does not see the rupee retesting its record low of 68-69/USD seen in August.

With inputs from Agencies