The BSE Sensex resumed better and remained in the positive terrain throughout the day before surging further to settle at one-week high of 25,549.72, a rise of 321.07 points or 1.27 per cent -- the best daily show since the 325-point spurt on July 2. Yesterday, it had risen 221.67 points.
The apex bank yesterday eased financing norms for infrastructure development and affordable housing, exempting long term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects, which boosted the shares from interest rates related segments.
ICICI Bank was the top gainer from the 30-share Sensex pack with a rise of 4.70 per cent. Shares of Axis Bank, SBI and HDFC Bank also notched up handsome gains.
On the infra side, L&T and BHEL rose in the Sensex. Outside the BSE barometer, IDFC shot up nearly 9 per cent and Adani Ports 6.8 per cent in prominent gainers in that sector.
Metal and mining counters too were in demand after a report showed that China's economy expanded in second quarter.
Revival of monsoon amid growth in merchandise exports in June 2014, strong European opening and fall in global crude oil prices also kept the market tempo upbeat for the second day in a row, brokers said.
Country's exports grew by 10.22 per cent in June this year while imports rose by 8.33 per cent.
"RBIs recent move to announce incentives to raise long term bonds for infrastructure financing was cheered. Positive global cues, easing inflation, and positive GDP growth in China, all boosted the market sentiment," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
The NSE 50-share CNX Nifty also shot up by 97.75 points, or 1.30 per cent, to end at 7,624.40.
Jignesh Chaudhary, Head of Research, Veracity Broking Services said: "Local equities extended its gain today also and traded positively for the second consecutive session with the help of blue chips which continued to rise as RBI on guidelines. These will give advantage to Indian infrastructure lenders."
Asian stocks closed mixed amid slide in oil prices to the lowest in over three months yesterday. Key benchmark indices from Hong Kong, Singapore and South Korea closed with gains while those from China, Japan and Taiwan finished with losses.
However, European markets were trading remarkably higher in their late morning deals. The CAC was up by 1.32 per cent, the DAX by 1.24 per cent and the FTSE by 0.95 per cent.
Twenty four scrips out of the 30-share Sensex ended higher while the remaining six finished lower.
Besides ICICI Bank, other gainers were Hindalco 4.19 per cent, Axis Bank 3.57 per cent, Tata Steel 3.13 per cent, Sesa Sterlite 2.97 per cent, BHEL 2.54 per cent, SBI 2.26 per cent, Maruti Suzuki 2.24 per cent and M&M 1.92 per cent.
Reliance Industries 1.73 per cent, Tata Motors 1.58 per cent, Larsen & Toubro (L&T) 1.53 per cent, HDFC Bank 1.07 per cent and Hero Motocorp 1.03 per cent also ended in the green.
Among the S&P BSE sectoral indices, Realty rose by 4.28 per cent followed by Bankex 2.50 per cent, Metal 2.20 per cent, Capital Goods 1.51 per cent, Auto 1.44 per cent, Power 1.27 per cent and Refinery 1.23 per cent.
Market breadth remained positive as 1,990 stocks ended higher, 952 stocks finished lower while 103 ruled steady. The total turnover rose to Rs 3,540.77 crore from Rs 2,684.29 crore yesterday.
* BSE index gains 1.27 pct
* NSE ends 1.3 pct higher
* IDFC gains, HDFC falls on infra bond norms
* NIIT Tech slumps after earnings halve
Indian shares surge over 1 pct on India's infrastructure boost
(Reuters) Indian shares rose over 1 percent on Wednesday, gaining for the second consecutive session, as lenders and infrastructure-related companies such as IDFC Ltd surged after the central bank exempted long-term bonds raised for the sector from reserve requirements.
The gains on Wednesday allowed the NSE index to recover all of its falls after the budget was unveiled on July 10 when Finance Minister first announced the country's measures to boost the infrastructure sector.
Some disappointment that the government had not announced any major measures had sparked a bout of profit-taking but analysts say sentiment for shares remain supportive given expectations for reforms in months ahead and improving economic data.
Data on Wednesday showed India's exports in June rose 10.22 percent from a year earlier, helped by a pickup in external demand and a weak currency, although the overall trade deficit data came in slightly above market expectations.
"Undercurrent is very strong. We have seen an improvement in the domestic macro situation, which is very positive. Also, there were no funding avenues for capital hungry infrastructure sector and RBI's move is in the right direction," said Daljeet S Kohli, head of research at brokerage, IndiaNivesh.
The broader NSE index rose 1.3 percent, or 97.75 points, to end at 7,624.4, to mark its highest close since July 7, when it closed at a record high.
The benchmark BSE index rose 1.27 percent, or 321.07 points, to end at 25,549.72, to mark its highest close since July 8.
Both the indexes also decisively closed above their technically important 20-day exponential moving average raising hopes for more gains.
Gains in lenders and infrastructure shares were sparked after the Reserve Bank of India issued guidelines exempting bonds for the sector from reserve requirements.
IDFC jumped 8.8 percent as the infrastructure lender that obtained a banking license in April, is seen as one of the main beneficiaries of the measures.
Among lenders, ICICI Bank rose 4.8 percent, and Axis Bank added 3.2 percent while State Bank of India gained 2.2 percent.
In housing developers, Jaypee Infratech rose 20 percent, hitting its maximum daily limit, DLF Ltd gained 5.8 percent and Unitech Ltd advanced 7 percent after funds for affordable housing were included as part of the bond reserve exemptions.
Pantaloons Fashion & Retail Ltd gained 3.9 percent after the company said late on Tuesday that its board is meeting on Friday to consider the fund-raising proposals, including a rights issue.
Hindalco Industries Ltd rose 4.4 percent after Bank of America Merrill Lynch upgraded the stock to "buy" from "underperform," citing better outlook for aluminium prices and lower capital expenditure by the company in the coming years.
However, NIIT Technologies Ltd slumped 7.5 percent, adding to its 11.8 percent fall on Tuesday after the company's April-June profit halved to 448.2 million rupees ($7.5 million) due to spending cuts at two major U.S.-based clients.
Housing Development Finance Corp Ltd fell 0.2 percent on worries the lender will be impacted by more aggressive pricing on loans by banks because of the RBI's measures while competition to raise long-term bonds could push up long-term rates.
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