D-street witnesses breathtaking rally; Sensex reclaims 17k level

Prolonging their enthusiasm for second straight day, domestic benchmarks vehemently rallied by about two percent to re-conquer the psychological 5,200 (Nifty) and 17,150 (Sensex) bastions during the session but, snapped the session a tad below that levels. The frontline indices gathered strength from strong global cues and commenced the northbound journey throughout the session with great conviction ahead of the Reserve Bank of India’s policy meet on July 31. Hyperactive bulls aggressively piled up positions not only in heavyweight stocks but in the broader markets too. Banking space witnessed a jubilant run today on the back of better than expected Q1 numbers registered by some banking majors. Banks like Corporation Bank, Syndicate Bank, Indian Overseas Bank, Allahabad Bank, Oriental Bank of Commerce and Bank of Baroda all have reported high-quality Q1 numbers.

Investors also piled up positions in the rate sensitives like auto and realty stocks on hopes that Reserve Bank of India’s (RBI) governor Duvvuri Subbarao will spring a pleasant surprise in the form of a rate cut. Meanwhile, data showing resumption of buying of Indian stocks by foreign institutional investors (FIIs) also underpinned sentiment. FIIs bought shares worth a net Rs 563.72 crore on July 27, 2012. FIIs had pressed sales recently after making sustained buying of Indian stocks.

There was no trepidation in the session either from the domestic or global front as market sentiment was buoyed by positive vibes coming from the European leaders that they would intervene to help the troubled countries from high cost of borrowing. In addition, European counters traded exultantly in the early session extending gains on hopes for more central bank stimulus measures in Europe and the US to help kick-start global economic growth. While, most of the Asian equity indices snapped the session in the green trajectory on Monday.

On the domestic front, power sector remained the top gainer on the BSE sectoral space, garnering over three and a half percent on the back of partial power restoration from northern grid. Moreover, Power minister Sushil Kumar Shinde said that ‘60% of power has been restored in the northern region and the remaining will be restored in few hours.’ Moreover, metal space also rallied over two percent and stocks like, JSW Steel, Jindal Steel & Power, Hindalco Industries, Nalco and Hindustan Zinc edged higher after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.22% on July 27, 2012. Besides, aviation stocks flied higher led by, Spicejet, which zoomed over 22% after witnessing turnaround in Q1 result. Stocks of Jet Air India and Kingfisher Airlines also took off 7.72% and 2.01% respectively

The NSE’s 50-share broadly followed index Nifty, surged by about a hundred points to settle tad below its psychological 5,200 support level moreover, Bombay Stock Exchange’s Sensitive Index -Sensex- added over three hundred points to finish well above the psychological 17,100 mark. Moreover, the broader indices too traded jubilantly and snapped the session with huge gains. Moreover, the market breadth remained positive, as there were 1,616 shares on the gaining side against 1,143 shares on the losing side while 119 shares remained unchanged.

The BSE Sensex surged 304.49 points or 1.81% to settle at 17,143.68, while the S&P CNX Nifty soared by 99.95 points or 1.96% to close at 5,199.80.

The BSE Sensex touched a high and a low of 17,163.95 and 16,919.14 respectively. The BSE Mid cap and Small cap index ended up by 1.53% and 1.29% respectively.

SBI up 4.63%, Tata Motors up 4.16%, Tata Power up 4.12%, ICICI Bank up 3.89% and BHEL up 3.82% were top gainers on the Sensex, while ONGC down 0.31%, Hindustan Unilever down 0.02% and Wipro down 0.01% were top losers on the index.

The top gainers on the BSE sectoral space were, Power up 3.58%, Realty up 3.13%, Capital Goods (CG) up 3.00%, Bankex up 2.67% and Consumer Durables (CD) up 2.53%, while there was no loser on the BSE sectoral space. 

Meanwhile, the Centre for Monitoring Indian Economy (CMIE) has projected a rise in steel price by 7.2% this year due to constrained availability of raw materials and subdued demand, as the construction gathers pace after monsoon season. Albeit, the international prices of the alloy fell drastically due to unfavorable macro-economic environment.

Heavy demand from the user industries, firmness in domestic iron ore prices and a weaker rupee are the main causes of the price hike in domestic market. CIME expects that the price rise of iron might be at a modest pace during the July-September season as demand for steel usually weakens in monsoons.

It also expressed hopes that the supply of iron ore might improve with the starting of mining activity in Karnataka and expects 8.5% growth in finished steel production. Earlier in June, the finished steel prices had fallen by 0.5-1%, due to steep correction in international prices.

The S&P CNX Nifty touched a high and low 5,206.60 and 5,129.75 respectively.

The top gainers on the Nifty were Reliance Infra up 5.54%, JP Associates up 5.23%, Cairn up 5.16%, IDFC up 4.54% and SBI up by 4.53%. On the flipside, Ambuja Cement down 1.21%, HUL down 0.13%, HCL Tech down 0.12% and ONGC down 0.02% were top losers on the index. 

The European markets were trading in green, France's CAC 40 was up 0.57%, Germany's DAX was down 0.81% and United Kingdom’s FTSE 100 was up 0.58%.

All the Asian markets, barring Shanghai Composite, went home in green on the first day of week on hopes that the U.S. Federal Reserve and European Central Bank will act to support their fragile economies. However, Korean shares touched four weeks high, while Japan's Nikkei stock average was up 0.4 percent after hitting a one-week high. Meanwhile, euro weakened 0.3% after rallying 1.4% last week to its highest level since July 5.