Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Sensex closes at 19,058, up 188 pts

Oct 04 2012, 17:57 IST
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The BSE benchmark index hit 19,107.04 – its highest since July 2011.  (Reuters) The BSE benchmark index hit 19,107.04 – its highest since July 2011. (Reuters)
SummaryThe BSE benchmark index hit 19,107.04 – its highest since July 2011.

The Sensex today breached the 19,000 mark for the first time in nearly 15 months in anticipation of government unveiling next wave of big-ticket reforms like opening the pension sector to foreign investment and raising FDI cap in the insurance sector.

The Sensex opened on a positive note and further picked up the momentum surging over 200 points to cross the 19,000 level amid abuzz in the markets that Cabinet later in the day is likely to clear measures like opening pension sector to foreign investment, raising FDI cap in insurance sector from 26 per cent to 49 per cent, the Forward Contract Regulation Act (Amendment) Bill and the Companies Bill, among others.

Investors expect a rush of capital inflows if these big-ticket measures go through the Parliament, said brokers.

The BSE benchmark index hit 19,107.04 – its highest since July 2011 – as investors bought shares across realty, consumer goods, banks, capital goods and power sectors. Rising for the fourth day, the 30-share index closed at 19,058.15, up 188.46 points or 1 per cent, as 20 stocks led by Bhel (6.57 pc), ICICI Bank (2.93 pc), Dr Reddy (2.16 pc) and SBI (2.15 pc) ended higher. Gains logged by ITC, HDFC Bank and L&T counters also helped Sensex sustain above 19K mark today.

Sensex has gained around 480 points in the last four days.

The 50-share NSE Nifty after breaching 5,800-level, ended at 17-month high levels of 5,787.60 - up 56.35 points. In the overall market, over 1,700 stocks rose while 1,244 scrips declined. Total investor wealth rose by Rs 48,000 crore to Rs 66.71 lakh crore, shows BSE data.

"Sensex today surpassed 19,000 and Nifty crossed 5,800 amid reports the government might clear bills aimed at hiking FDI in insurance and opening up the pension sector to foreign investors," said Amar Ambani, Head of Research, IIFL.

Shares of companies with exposure to insurance business including Aditya Birla Nuvo and Reliance Capital ended with 2-5 per cent gain today.

Meanwhile, rupee gained for the fifth day to touch a five and half month high, breaching 52 against dollar for the first time since April 20, 2012.

Globally, Asian stocks ended mixed while European shares pared losses ahead of Bank of England's and the European Central Bank's meets later in the day.

In Asia, key benchmark indices in Singapore, Hong Kong and Japan rose by between 0.09-0.89 per cent while indices in South Korea and Taiwan shed by between 0.03- 0.17 per cent.

European stocks see-sawed in their early trades and were quoting slightly better in the afternoon trade. Key benchmark indices in UK, France and Germany were up between 0.15-0.28 per cent. Indication of higher opening in US index futures also boosted the market sentiment, said dealers.

Speaking on domestic markets, Kishor P Ostwal, CMD, CNI Research Ltd said: "As expected, Nifty climbed but finding resistance at 5800 level...support for Nifty lies at 5630 and if broken then we can see 5500 in October." Among Sensex, BHEL was the top gainer with a rise of 6.57 per cent, followed by ICICI Bank (2.93 pc), Dr Reddy's Lab (2.16 pc), SBI (2.15 pc), Maruti Suzuki (1.97 pc), HDFC Bank (1.88 pc), ITC (1.78 pc), GAIL India (1.77 pc), HDFC (1.65 pc), Tata Steel (1.61 pc), L&T (1.48 pc), Bharti Airtel (1.47 pc), ONGC (0.98 pc) and RIL (0.77 pc).

However, Cipla declined by 3.86 per cent, followed by M&M (1.24 pc), Bajaj Auto (1.05 pc), Hero MotoCorp (1.02 pc) and Coal India (0.92 pc).

"While the reform initiatives area welcome start, we believe that, more reforms on the core sector – land reforms, mining, fuel supply for power, etc – will make the recent rise in the markets sustainable," said Dipen Shah, Head of PCG (Private Client Group) Research from Kotak Securities.

Among sectoral indices, the BSE-Realty spurted by 4.94 per cent, followed by BSE- D (2.44 pc), Bankex (1.92 pc), BSE-CG (1.89 pc), BSE-Power (1.57 pc), BSE- Oil&Gas (1.05 pc) and BSE-FMCG (0.96 pc) while BSE-HC dropped by 0.92 per cent.

The total turnover was up at Rs 2,958.36 crore from Rs 2,597.43 crore yesterday.

Persistent capital inflows have aided the market sentiment. Foreign Institutional Investors (FIIs) bought shares worth a net Rs 602.39 crore yesterday, as per provisional figures on the stock exchanges.

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