Re-energized bulls take benchmarks to 28-month highs

Boisterous benchmarks showcased an enthusiastic performance on Wednesday by rallying close to two and a half percentage points and breaking a lot of psychological levels in their northbound journey. There appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Frontline indices managed to finish the session around highest levels in 28 months and settled comfortably above 6,100 (Nifty) and 20,200 (Sensex) levels as investors took to hefty across the board buying. Sentiments got buttressed after buying in rate sensitives got accelerated as the Reserve Bank of India’s Governor Duvvuri Subbarao said that the central bank will take note of falling inflation when discussing potential interest rate cuts.

Sentiments got bolstered after Finance Minister P Chidambaram said that he would set up a cell in his office to monitor and resolve the issues for speedy completion of the stalled infrastructure projects. Some support also came in after the global rating agency Standard & Poor’s said that India is projected to grow by 6 percent in the current fiscal, while growth is expected to be steady in most of the Asia Pacific economies.

Globally, European counters recovered in early deals on short-covering. Though, markets opened in red after growth data from the top two euro-zone economies deflated sentiments in initial trade. France entered recession while Germany's growth rate was lower-than-expected. Asian markets snapped Wednesday’s trade mostly in green with Japanese Nikkei surging to a fresh five and a half year high as Japanese exporters rallied on the yen’s sharp slide. The yen hovered near a four and a half year low as against the dollar set on May 14, 2013.

Back home, some support also came in from buying in realty stocks. Scrips like, DLF, Indiabulls Real Estate, Unitech, DB Realty, HDIL, Parsvnath Developers and Anant Raj Industries traded jubilantly during the session as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Lower interest rates may help revive demand for properties. Additionally, public sector oil marketing companies viz. BPCL, HPCL and IOC all edged higher after the central bank allowed them to raise a part of their short-term capital requirements through overseas borrowings. Aviation and infra sector stocks too traded jubilantly after the Reserve Bank of India eased norms for external commercial borrowings (ECBs) for the aviation and housing sectors, in a move to improve flow of cheaper funds into key infrastructure sectors.

The NSE’s 50-share broadly followed index Nifty rose by over one hundred and fifty points to end tad below its psychological 6,150 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex surged by about five hundred points to end above its psychological 20,200 mark. The broader markets too traded in-line with benchmarks and snapped the session in green terrain.

The overall volumes stood at over Rs 2.10 lakh crore, which remained on the higher side as compared to that on Tuesday. The market breadth was evenly divided as there were 1,466 shares on the gaining side against 973 shares on the losing side, while 160 shares remain unchanged.

Finally, the BSE Sensex surged 490.67 points or 2.49% to settle at 20,212.96, while the CNX Nifty climbed by 151.35 points or 2.52% to end at 6,146.75.

The BSE Sensex touched a high and a low of 20,241.96 and 19,798.18, respectively. The BSE Mid cap index up by 1.58% and Small cap index was up by 0.98%.

The top gainers on the Sensex were, HDFC up 4.70%, SBI up 4.07%, L&T up 3.85%, ICICI Bank up 3.80% and HDFC Bank up 3.72%, while Wipro down by 0.53% was the only loser on the index. 

The top gainers on the BSE Sectoral space were, Realty up 4.04%, Bankex up 3.95%, Capital Goods up 3.00%, PSU up 2.36% and Auto up 2.29%, while there was no loser on the sectoral space.

Meanwhile, accelerating industrial production, improvement in global conditions and likelihood of good monsoon, could turnaround the sagging economy this fiscal.  The government hopes of registering GDP growth rate ranging between 6.1-6.7 percent in 2013-14. According to Planning Commission Deputy Chairman Montek Singh Ahluwalia, ‘India has had not a good year, which was better year for many other countries, however hoping to have much better year (2013-14).’

The Central Statistical Organization has pegged Indian economic growth at 5 percent in 2012-13 in its advance states. Meanwhile, the inflation measured in terms of Wholesale Price Index (WPI) fell to 3.5-year low of 4.89 percent in April compared to 5.96 percent in March this year and 7.50 percent in April, 2012. The retail inflation, as measured by consumer price index, also came down to single digit at 9.39 percent in April after many months, indicating that inflationary expectation is on declining trend.

The CNX Nifty touched a high and a low of 6,157.10 and 6,018.85 respectively. 

The top gainers on the Nifty were PNB up 7.60%, Reliance Infra up 5.22%, IndusInd Bank up 5.14%, Kotak Bank up 5.12% and DLF up 4.78%.

On the other hand the top losers on Nifty were, Power Grid down 0.74%, Ultratech Cement down 0.51% and Cairn down by 0.08%.

The European markets were trading in green, France’s CAC 40 up by 0.30%, the United Kingdom’s FTSE 100 up by 0.16% and Germany’s DAX up by 0.20%.

Asian stock markets ended mostly higher on Wednesday with Japanese market touching highest level since December 2007 with a weak yen buoying up sentiment. Hong Kong market went home with green mark, rebounding from its biggest two-day drop in a month, but investors were mainly focused on a handful of stocks on hopes of an earnings turnaround. Chinese market ended higher on Wednesday supported by strength in telecom equipment suppliers. Seoul market closed almost flat after moving in a narrow range, as investors adopted a cautious stance amid a lack of market momentum and lingering concerns over the yen's slide.