Post-badla ban, Sensex gains 100 points

Our Markets Bureau

Mumbai, May 17: RECOVERING from the shock of ban on badla and deferred products and all the good news like the continued buying spree by foreign institutional investors (FIIs) in the domestic markets, encouraging advice from the US markets which helped Asian markets to surge and increasing investor interest in the Reliance duo helped the stock markets at home to post a good performance on Thursday.

The benchmark index of the The Stock Exchange, Mumbai (BSE), the Sensex gained more than 100 points in the last three trading session. The gain of 78 points on Thursday was one of the sharpest gains in the last 40 trading session.

Led by Reliance Industries Ltd (RIL) and Reliance Petroleum Ltd (RPL) the market continued to surge ahead. The interest in RPL was because of the reports that the company was going to hike FII holding from 40 to 49 per cent besides news about its proposed ADR issue, market sources said.

FIIs turning net buyers after a recent lull and pumped in over Rs 215 crore in the first two session of the current settlement, reportedly made heavy all-around purchases in old economy stocks with their thrust on the cement sector also helped significantly in improving the market sentiment.

The Sensex opened on a promising note at 3607.46 and later gradually moved upwards to 3675.45 before closing at 3669.76 as against Wednesday’s close of 3592.06, showing a net rise of 77.70 points. S&P CNX Nifty followed suit and closed at 1174.95 as compared to the previous close of 1151.15, a gain of 23.80 points.
The Dow Jones Industrial Average flared up by about 343 points to above 11,000 for the first time in the last eight months on the optimism that a lower interest rate of about 4 per cent (after the recent rate cut by 50 basis point) would revitalise the US economy, Nasdaq Composite Index too rose by about 81 points on Wednesday.
ASk-Raymond James & Associate Pvt Ltd executive director Anand Tandon said, “Clearly all liquidity in the world is finding its way in the Indian markets along with some other developing markets.”

The other reason cited for the bullishness was the possibility of an inclusion of some more companies from India and more industry representation in the MSCI Index, which is going to be revamped in a day or two. Marketmen are of the view that the MSCI Index would include RPL, Sterlite Optic, VSNL and HDFC Bank.

The weather bureau’s report that the rainfall would be better this year than expect, which would boost the rural demand, also had a positive impact.

Marketmen also said that sentiments also improved on the rumours that US sanctions would be lifted soon. The announcement was expected in a day or two, they said.The trading volume at BSE increased sharply on Thursday with the exchange registering a total turnover of Rs 1,424.47 crore up from Wednesday’s turnover of Rs 1,360.17 crore.

Satyam Computer continued to attract the largest share of turnover with 53.20 lakh shares changing hands valued at Rs 124.36 crore. The stock price rose from the earlier close of Rs 224.25 to Rs 233.25 on Thursday.