Sensex closes 174 points higher

Oct 11 2012, 17:46 IST
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Sensex rallied nearly 174 points to close at 18,804.75 on all-round buying.  (Reuters) Sensex rallied nearly 174 points to close at 18,804.75 on all-round buying. (Reuters)
SummarySensex rallied nearly 174 points to close at 18,804.75 on all-round buying.

The Sensex today rallied nearly 174 points on all-round buying after Finance Minister P Chidambaram talked up markets by saying there is no serious downgrade threat, amid hopes of Infosys posting robust numbers to kickstart the earnings season tomorrow.

The sentiment was also boosted by anticipation of good IIP and inflation data, which will also be released tomorrow.

After nosediving by 162 points yesterday in a knee-jerk reaction to S&P's rating downgrade threat, the BSE benchmark index today picked up pace on emergence of value-buying after touching a nearly two-week low of 18,581.49 in morning trade. The index hit day's high of 18,847.81 and finally closed at 18,804.75, a rise of 173.65 points or 0.93 per cent over previous closing of 18,631.10.

"Finance Minister P Chidambaram's comment on no serious threat of downgrade helped the markets recover. There are also hopes of a rate cut by RBI by month-end," said Rikesh Parikh, VP-Markets Strategy and Equities, Motilal Oswal Securities. Infosys, L&T , ITC, Tata Motors and HDFC Bank fuelled today's rise.

Bhel, Bharti Airtel and Sterlite Industries, which rose over 2 per cent each, were among Sensex's best erformers.

The Nifty closed up 55.90 points at at 5,708.05.

"All eyes will be on the earnings from Infosys and HDFC Bank on Friday. Investors will also keep an eye on the IIP data and CPI inflation, both of which will be released tomorrow," said Amar Ambani, Head of Research, IIFL.

Investor wealth rose by Rs 64,000 crore to Rs 65.92 lakh crore at BSE. Overall, 1,656 stocks led by realty, capital goods, metal, power and banks gained while 1,183 scrips, including shares from pharma sector, dropped.

"I don't think there is a serious threat of downgrade", Chidambaram said in Tokyo when asked about his reaction to the recent threat of downgrade of India's credit rating in 24 months by S&P if more reforms measures were not implemented.

Fertiliser stocks advanced today after the CCEA approved modification in the procedure for release of fertiliser subsidy.

Major Asian indices stocks, excepting Hong Kong which ended just higher, finished lower between 0.04-1.85 per cent.

Global credit rating agency Standard & Poor's yesterday cut Spain's credit rating by two notches to just one level above speculative or junk grade with a negative outlook, citing mounting risks to the country's public finances.

Disappointing earnings outlook from some of the US firms also weighed negatively on Asian stocks,

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