Better-than-expected quarterly earnings from global financial majors Goldman Sachs and JP Morgan Chase, as well as a positive statement from the government on taking forward key financial sector reforms helped domestic equity bourses end the week on Friday with robust gains, their best since May.
The 30-share Sensex of the BSE rallied by 494.67 points, or 3.47%, to close the day at 14,744.92 points. The broader 50-share Nifty of the NSE ended the trading session at 4374.95 points, posting a gain of 3.39%, or 143.55 points. The week-long rally also helped equity markets reverse most of the losses suffered because of Budget disappointment.
The benchmark Sensex ended the week with a gain of 9.19%, while the Nifty rose 9.27%. Asian shares also extended their rallies with the Hang Seng gaining 2.42% on Friday, the Taiwan Weighted 1.04% and the Straits Times 1.25%.
Finance secretary Ashok Chawla?s announcement in New Delhi that the government would carry forward key reforms in pension, banking and insurance further boosted sentiment among market participants. Markets were disappointed when reforms in these sectors failed to find mention in finance minister Pranab Mukherjee?s Budget speech.
?Finally, good news has started trickling in, indicating that the worst is behind us. The results announced by Goldman Sachs, JP Morgan Chase and Intel among others have bettered analysts? expectations. And whatever results have come from India Inc are also impressive,? said Elara Capital head of broking Vipul Dalal.
Market breadth, indicating overall health, remained positive throughout the day?s trading session, with 1,832 stocks on the BSE gaining, compared with 825 that declined. At the vanguard of the rally were financial and auto sector stocks like M&M, Tata Motors, Hero Honda, ICICI Bank and HDFC.
The auto sector index gained the most, 5.16% to 5,069.86, followed by the banking index, 4.76% to 8,132.16 after the biggest private lender, ICICI Bank, surged to Rs 742.35 on expectations of more sops for the industry.
The IT sector index rose 4.11% to 3,505.28, tech 4.09% to 2,711.71, realty 3.55% to 3,347.10, PSU 3.31% to 8,125.29, FMCG 3.02% to 2,499.86, metals 3.01% to 11,133.20, and power 2.82%.
Meanwhile, the rupee weakened further by six paise to 48.72/73 against the dollar due to demand for the greenback from importers and state-run banks, which was also strong overseas. The domestic currency moved in a narrow range of 48.60 to 48.75 after resuming higher at 48.60/71 a dollar against its last close of 48.66/68.