BSE Sensex rallies 245 pts on economic growth prospects; Reliance Industries hogs limelight

BSE Sensex today extended gains for the second straight session by rallying over 245 points to close at 27,371.84…

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The benchmark BSE Sensex today extended gains for the second straight session by rallying over 245 points to close at 27,371.84 as the government’s projection of 5.5 per cent GDP growth boosted economic sentiments.

The 30-share index after opening on a strong note at 27,292.55 continued its upward journey to hit the day’s high of 27,497.12. But, profit-booking towards the fag-end at improved levels trimmed gains and finally settled 245.27 points, or 0.90 per cent, higher at 27,371.84.

On similar lines, the wide-based Nifty of the National Stock Exchange after shuttling between 8,263.45 and 8,208.60 points, ended 65.90 points, or 0.81 per cent, higher at 8,225.20.

Stocks of heavy-weight Reliance Industries hogged the limelight on a flurry of buying and ended 2.26 per cent higher at Rs 900.15 on speculations that the company may launch its much-awaited telecom services next year, rendering major support to the indices.

Meanwhile, the Finance Ministry’s Mid-Year Economic Review has said that India’s GDP is expected to rise to 5.5 per cent in the current fiscal from 4.7 per cent last year on back of improving macro-economic situation.

The strong buying momentum over the past two sessions has been driven by a firming trend on global markets after the Federal Reserve said on Wednesday a rate hike was unlikely in the short-term, brokers said.

Globally, trends at other Asian markets too remained bullish and European markets were higher in their opening trade, influencing trading sentiments here.

Expectations of acceleration in reforms process after the Cabinet’s clearance to the Constitutional Amendment Bill on GST too triggered buying activity, they said.

Of the 30 Sensex constituents, 21 ended with gains led by Hindalco, ICICI Bank, Tata Power, Sesa Sterlite, Wipro, TCS, Coal India, L&T, NTPC, Dr Reddy, Infosys, HDFC Ltd, Tata Steel, ONGC, M&M and Tata Motors and rose between 0.20 and 2.95 per cent.

Sectorwise, BSE IT index gained the most by soaring 1.95 per cent followed by Metal index (1.79 pc), Oil & Gas (1.48 pc), Capital Goods indes (1.29 pc), Power index (1.28 pc) and Banking index (0.75 pc).

Small-cap index also rose 0.57 per cent and Mid-cap Index by 0.36 per cent.

Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities
Markets saw major movements during the current week. Clearly, signs of slowdown in global economic growth was the major concern that led to sell off in the early part of the week. However, markets bounced back post dovish comments from the Fed Guv. The Fed said that a rate hike is unlikely to start until “at least the next couple of meetings.”
Federal Reserve retained the phrase “considerable time” in its policy statement, and also introduced another word, “patient”. Brent crude continued to remain weak and closed around the USD 60 level. During the week, the government received cabinet nod for introduction of GST. The landmark tax reform is expected to reduce logistical costs and simplify tax structure for the manufacturers. The government also released the approach paper on Coal auctions. On the fiscal side, the government said that meeting its 2014/15 fiscal deficit target of 4.1 percent would be challenging.
So far as today’s market is concerned, Shares of ICICI Bank and Reliance Industries were major contributors to the Sensex gains, up 2 percent each. Wipro, Hero Motocorp, Coal India, Sesa Sterlite, NTPC, Hindalco Industries and Tata Power gained 2-3 percent.

Indian shares gain for second day; IT stocks, Reliance lead

(Reuters) Indian shares rose for a second consecutive day on Friday, led by gains in IT stocks after global rival Accenture Plc raised its revenue forecast while Reliance Industries rose on bets it will roll out its telecom services in the next few months.

Gains also tracked Asian shares that enjoyed their best day in 15 months after Wall Street boasted its biggest two-day advance since late 2011 amid relief the Federal Reserve was in no rush to withdraw stimulus from the U.S. economy.

Investors remained encouraged after the Indian cabinet approved a constitutional amendment bill on Wednesday to rationalise state and central indirect taxes into a harmonised goods and services tax (GST).

Still, for the week, the shares ended flat to slightly higher after two previous weeks of declines as a slump in the Russian rouble sparked fears of financial contagion earlier in the week.

“Overall improving liquidity and likely window dressing by funds may keep equities at a higher keel till 2014 ends,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services Ltd.

The probability of fresh short positions ahead of monthly derivatives expiry next week is also lower, he added.

The NSE index rose 0.81 percent to 8,225.20, while the benchmark BSE index ended up 0.9 percent at 27,371.84.

The 50-share index ended 0.01 percent higher for the week, while the BSE index market a weekly gain of 0.08 percent, averting a third consecutive weekly decline.

Software stocks led the gains after global rival Accenture Plc on Thursday raised its FY15 revenue growth forecast to 5-8 percent from 4-7 percent earlier.

Infosys gained 1.7 percent, Tata Consultancy Services rose 2 percent and Wipro advanced 2.3 percent.

HCL Technologies gained 2.3 percent while Tech Mahindra added 1.2 percent.

Reliance Industries gained 2.32 percent on bets the company’s telecom unit Reliance Jio will rollout 4G services in the next few months, traders said.

Select coal users gained after the government on Thursday released an approach paper on rules for auctioning of coal mines.

Sesa Sterlite gained 2.2 percent, Hindalco Industries rose 3.2 percent while CESC  advanced 1 percent.

Among other blue-chips, ICICI Bank rose 3 percent, while Larsen & Toubro ended up 1.9 percent.

Among the decliners, Bharti Airtel fell 1.5 percent on worries over Reliance Jio’s telecom rollout and the company’s foreign currency debt, traders said.

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