Sensex soars 433 points, biggest rally in 2012
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The BSE Sensex soared over 470 points and the Nifty index took out the 5,000 mark as Indian markets witnessed a dramatic rebound Wednesday. This was the biggest point gain for the Sensex since December 21, 2011.
Global cues supported sentiments. European stocks opened in the green and gained strength. Markets in France and Britain traded 1-2% higher. At 3.45 p.m., Spain's IBEX index traded 3% higher.
European stocks rose despite negative news flow around Spain, where the government said it is losing access to credit markets. The European Central Bank is likely hold interest rates unchanged at 1 per cent in a meeting today.
Asian markets rose for a second straight day. The rupee, too, held on to the gains, helping sentiments on the Street. It traded 22 paise higher against the dollar at 55.42.
The Sensex closed 433.66 points or 2.7% higher at 16,454, while the Nifty gained 134 points to 4,997. The Sensex made an intraday high of 16,494, while the Nifty hit the 5,010 mark.
Analysts said it was a pullback rally and may not last. "Markets were oversold so the rally was expected, but fundamentals have not changed," Radhika Gupta, director at Forefront Capital Management told NDTV Profit.
All group of stocks closed with big gains on the BSE, but rate sensitives such as banks (3%), auto (3.86%) and realty (2.65%) drove the rally on hopes of a rate cut later this month. Faltering growth, India's March quarter GDP was lowest in nine years, and falling crude prices have raised hopes of a rate cut.
On the Nifty index, 48 of the 50 stocks closed in the green. Tata Motors (5.75%) made a smart come back and was the top Nifty gainer. The stock has lost 20% over the last month on fears of margin compression in the luxury Jaguar Land Rover models. Hero MotoCorp (4.8%) also saw buying interest.
Banking stocks gained for a third straight day. PSU lender Bank of Baroda (3.9%) was among the top Nifty gainers. India's biggest lender SBI (3.6%) and private sector banks like HDFC Bank (3.7%) also saw big gains.
Drug makers Cipla and Dr Reddy's ended with marginal losses amid risk on trade.
Tobacco major ITC (3.8%) was the top contributor to Sensex gains today. Infra stocks like IVRCL (9.5%) and Lanco (5.3%) gained ahead of a crucial meet on infra that will be chaired by Prime Minister Manmohan Singh.
The market breadth was strong with over 84% stocks rising on the broader BSE 500 index.
(With inputs from Reuters)