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.

Worst over? Sensex rides high on auto, banking and realty stocks

Nov 30 2012, 06:28 IST
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SummaryThe benchmark indices rallied smartly on Thursday, led by sectors like automobiles and banking. Bajaj Auto was the biggest gainer on Thursday, with the scrip rising 5.01%.

The benchmark indices rallied smartly on Thursday, led by sectors like automobiles and banking. Bajaj Auto was the biggest gainer on Thursday, with the scrip rising 5.01%. Stocks like Tata Motors, ICICI Bank, HDFC, Sterlite Industries, HDFC Bank, Larsen & Toubro, among others, also gained in the range of 2-5%.

The BSE Sensex ended the day at 19,170.91, up 328.83 points or 1.75% from close Wednesday, while the Nifty settled at 5,825.00, up 97.55 points or 1.70% from the previous close. As per BSE data, 1,681 stocks advanced compared to 1,264 decline, thereby pushing the market capitalisation higher by R80,000 crore from Tuesday's close. Market experts were of the view that massive short covering ahead of Thursday's expiry also lent support to Indian equities. Interest rate sensitives and high beta stocks like realty, banks, and automobiles advanced in the range of 2-4% on the back of revival in investor risk appetite.

According to Bloomberg data, realty stocks continued to be the biggest gainer in the last three months, with the BSE Realty index rising nearly 35% since September 1. Realty was badly beaten in 2011, and that's one reason for the upmove in 2012, said analysts. Improved sales and clearing of a backlog of projects has also helped, they said. Within the realty pack, a host of housing finance companies such as HDFC have gained on improved loan books.

Banking is another rate-sensitive sector that has seen a significant upmove in the last three months. “The worst has already been priced in for the sector and everyone is anticipating a cut in key policy rates in the near future. The expected cuts may be delayed, but cannot be denied,” said AK Prabhakar, senior VP, equity research, Anand Rathi. Experts also said that foreign institutional investors have also been accumulating shares of banking and financials firms since the second week of September.

Stocks within consumer durables, banking, automobiles, and capital goods space have also witnessed handsome gains during the past three months. The BSE Consumer Durables index has given returns of 27.2% since the beginning of September, followed by CNX Bank Nifty (19.79%), BSE Auto (16.11%), BSE Capital Goods index (15.57%), and BSE FMCG index (12.52%).

United Spirits has been the best performer in the BSE 200 universe. The scrip has given returns of 120% on the back on the United Spirits-Diageo deal. “The IMFL business in India, a

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