Exuberant Sensex showcases momentous performance; puffs up over 434 pts

After all that dilly dallying in the start of the week, the Indian frontline indices have showcased a boisterous feat of registering biggest intra-day gains since January 3, 2012. It was one of those days when bulls went on rampage and the Sensex snapped the enthralling session with over a 434 points rally in an euphoric atmosphere after bottom fishing in fundamentally strong shares gathered greater force.

Increasing hopes of some monetary easing by the European Central Bank and a rate cut by the Reserve Bank of India later this month, encouraged the market participants to catch the falling knife and trigger the reversal for the Indian stock markets, which off-late were getting accustomed to daily obliteration. The frontline indices managed to fire on all cylinders as sentiments remained buoyant across the board.

After the gap-up opening in morning, the frontline gauges managed to capitalize on the momentum and even flirted with the crucial psychological 5,000 (Nifty) and 16,500 (Sensex) levels, signaling that bullishness may be returning to the markets on expectations that the markets have bottomed out.

Sentiments remained sanguine since the start of trade as domestic markets rallied in tandem with their regional peers on the back of a slew of encouraging economy reports. The unexpectedly encouraging US services sector growth data and Australian GDP expansion numbers along with reports that the G7 nations agreed to coordinate their response to avert an onerous financial turmoil Europe Union, together fortified sentiments globally, prompting tentative recovery in investors’ risk appetite.

Back home, market participants remained in cheerful mood hoping that the Reserve Bank of India and the central government would announce aggressive policy measures to reinvigorate the deteriorating economic growth.

The rate sensitive Automobile counter witnessed relentless buying in the session as it jumped close to four percent and remained the top gainer in the BSE sectoral space on increasing hopes of monetary easing by RBI in its forthcoming mid-quarter policy review on June 18. Other rate sensitive sectors like Banking and Realty too settled with handsome gains of over two and half a percent.

While the defensive FMCG counter too spurted close to three percent as investors hoped just about timely arrival of annual monsoon rains in India would brighten the prospects of higher farm output. Investors also drew some solace from the supportive cues from money markets where Indian rupee appreciated against the US dollar.

On the global front, leads from the markets across the globe too were buttressing as benchmarks in Japan, Hong Kong and South Korea spurted by around one and half a percent. The European markets too traded with notable gains as investors’ awaited outcome of ECB meeting in which they hope the central bank to announce some policy easing measures to stimulate the economy and stem the debt crisis.

Back home, the NSE’s 50-share broadly followed index Nifty, accumulated close to three percent gains to settle just shy of the psychological 5,000 support level while Bombay Stock Exchange’s Sensitive Index - Sensex rallied over four hundred thirty points to finish just above the crucial 16,450 mark. Moreover, the broader markets too showed smart performance as they rallied around one and half a percent but went on to underperform their larger peers.

The markets jumped on strong volumes of over Rs 1.51 lakh crore while the turnover for NSE F&O segment also remained on the higher side as compared to that on Tuesday, at over Rs 1.08 lakh crore. The market breadth remained optimistic as there were 1,849 shares on the gaining side against 894 shares on the losing side while 123 shares remained unchanged.

Finally, the BSE Sensex soared 433.66 points or 2.71% to settle at 16,454.30, while the S&P CNX Nifty jumped 133.80 points or 2.75% to close at 4,997.10.

The BSE Sensex touched a high and a low of 16,494.50 and 16,100.36 respectively. The BSE Mid cap and Small cap indices surged 1.78% and 1.48% respectively.

Tata Motors up 5.71%, L&T up 4.77%, Jindal Steel up 4.63%, Hero Moto up 4.29% and Sterlite up 4.06% were the major gainers on the Sensex, while there were no losers on the index.

On the BSE sectoral space, Auto up 3.86%, Capital Goods up 3.63%, Power up 3.49%, Bankex up 3.01% and FMCG up 2.95%, while there were no laggards on the BSE sectoral space.

Meanwhile, in its attempt to revitalize the dwindling growth in Asia’s third largest economy, industry body Confederation of Indian Industry (CII) has come up with a 10-point measures for economic revival that include monetary, fiscal and administrative actions. The industry body is of the belief that the government has to come out of the policy paralysis and take strong actions cohesively to avoid further deterioration the economy.

Expressing their concerns over sharp slowdown in GDP growth in the fourth quarter, CII felt that various measures like fast-tracking the implementation of Goods and Services Tax (GST) and simplifying foreign direct investment (FDI) regulations along with lifting FDI caps in the aviation, retail, defence and insurance sectors would be imperative for the economic revival.

The body also batted for strong monetary stimulus measures from the Reserve Bank of India and called for sharp reduction in both repo rates and CRR. It also supported the idea that government must take serious efforts to correct the current account deficit by encouraging exports and containing imports, arresting rupee slide, reducing subsidies, implementing financial sector reforms and removing bottlenecks in infrastructure growth.

Targeting an economic growth rate of 7.5% for the current financial year 2012-13 and 9 percent in 2013-14, the body expressed confidence in the nation’s growth potential and avowed that it is not impossible to achieve higher growth rates, provided the government takes corrective and timely measures to support the economic recovery.

The S&P CNX Nifty touched a high and low 5,010.45 and 4,886.15 respectively.

The top gainers on the Nifty were Tata Motors up 5.41%, Hero Moto up 5.08%, Jindal Steel up 4.87%, R Infra up 4.62% and Ambuja up 4.59%.

On the flipside, Cipla down 0.34%, BPCL down 0.26% and Dr Reddy’s down 0.21% were the top losers on the index.

The European markets were trading on a strong note, as France's CAC 40 surged 1.99%, Germany's DAX soared 1.51% and United Kingdom’s FTSE 100 jumped 1.23%.

Sentiments remained jubilant for second day in a row in Asian region and all the Asian counters barring Chinese shanghai snapped the day’s trade in the positive terrain on Wednesday amid expectations that the European Central Bank will introduce easing measures to calm the falling equity markets in its rate-setting meeting scheduled for later in the day. Moreover, European Group of Seven members promised a speedy response to the continent’s debt crisis too aided the sentiments. Meanwhile, Australian economy grew at twice the rate economists estimated, its gross domestic product advanced 1.3 percent in the quarter from the previous three months.

On the regional front, Japanese Nikkei rose about two percent on Wednesday as investors looked to policy makers to counter the euro zone crisis, and Australian and US data offered some positive news while, Taiwan Weighted jumped 0.80 percent on hopes for policy measures to stem the European debt crisis. However, Chinese main stock index ended down 0.10 percent, weighed down by property shares after the official Xinhua news service reported that China’s main real estate regulator plans to maintain current restrictions.

South Korea’s KOSPI Composite Index remained closed for a holiday.