Sensex soars over 350 points, Nifty takes 4950
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The BSE Sensex jumped over 350 points as buying interest gained momentum on the Dalal Street Wednesday. The Nifty index traded above the key 4,950 mark.
Global cues supported sentiments. European stocks opened in the green and gained strength with markets in France, Britain and Spain rising over 1-2%. Earlier, Asian markets closed higher. Japan's Nikkei benchmark gained for a second straight day.
The rupee held on to the gains, helping sentiments on the Street. It traded 15 paise higher against the dollar at 55.49 at 1.30 p.m.
The Sensex was up nearly 370 points or 2.3% at 16,388, while the Nifty gained 114 points to 4,977.
Analysts attributed the gains to short covering or a bounce back after stocks are oversold. But, with the sharp fall over the last two month, a bottom would not be far away, some said.
"A breakout or a breakdown from the current levels will depend on the news flow. The Nifty is trading at 4,900 levels and the maximum downsides are 5-10 per cent," Gaurang Shah of Geojit BNP Paribas Finance Services told NDTV Profit.
Banking stocks (2.35%) led the gains for a third straight day. India's economic growth has slowed to a nine-quarter low and investors are hopeful of a rate cut later this month.
PSU lender Bank of Baroda (3.15%) and private lenders like Axis Bank (3%) and HDFC Bank (3.2%) were among the top Nifty gainers.
"The build-up in bank stocks is in anticipation of a rate cut... All these gains would ease off if there is a status quo on rates," Shah added.
Rate sensitive stocks like auto (3.3%) and realty (2%) also saw strong buying interest. Tata Motors (5.75%) made a smart come back. The stock has lost 20% over the last month on fears of margin compression in the luxury JLR models. Hero Moto (5.6%) also saw gains.
Tobacco major ITC (4.65%) was the top contributor to Sensex gains today.
Only three stocks traded lower on the Nifty index. Grasim (-0.90%), the top Nifty loser, saw profit booking.
The market breadth was strong with 83% stocks rising on the broader BSE 500 index.