The markets had a good session of trade, thanks to the positive set of cues from the global and domestic fronts. The rally was more of a short covering led by Banking and IT counters, especially HCL Tech and TCS, states Ashish Chaturmohta from India Infoline Wealth. The Nifty closed at 5,851 up 110 points and the Sensex clocked in 349 points to close at 19,470. In the broader markets, the smallcap and the midcap indices gained 1% each but underperformed the BSE benchmark index which gained nearly 2%
The benchmark indices had a gap-up opening on the back of the positive cues from Wall Street and an enthusing start to the proceedings across Asia. There was a momentary blip as realty and ADAG stocks spiralled downwards in a knee-jerk reaction to the denial of bail by the special court to five corporates involved in the 2G scam. But the re-emergence of momentum in late-noon trades as a fledging Europe compensated for the weakness in select pockets. The market sentiment has also been boosted by the assertion of the Indian Meteorological Department that the South-West monsoon will be normal, increasing expectations of robust farm output which really may bring a relief from high food prices.
The upbeat results posted by HCL Tech has come as a balm to the hitherto besieged IT space, which has been reeling under selling pressure post the sub-par Infosys results. HCL Technologies has zoomed by 9.2% to Rs 519 after its consolidated revenues for the third quarter jumped by 5.5% at Rs 4077.9 crore versus Rs 3862.5 crore in the last quarter and net profit surged 16.2% to Rs 461.3 crore versus Rs 397 crore seen in the previous quarter. And the positive sentiment rubbed on to the other IT counters; TCS, which is scheduled to announce its results on Friday, has soared by 4.6% at Rs 1218 and Infosys has added 0.6% at Rs 2905.
FIIs have been net sellers in futures and options in seven out of last ten sessions. Explaining the trend, Chandan Taparia, Derivatives and technical analyst, Anand Rathi Financial Services opines that the 600 point rally that the Nifty saw from 5350 to 5950 levels was mainly due to FIIs buying. Now they might be booking or reducing positions to buy it again at lower levels.
All the sectoral indices closed in the positive. Auto, IT and Metal indices up 2% each lead the gains followed by Cnsumer Durables and Bankex which added 1% each. Capital Goods index up 0.5% was the only laggard throughout the day.
Among the Sensex gainers were Mahindra & Mahindra and TCS up nearly 5% each followed by Hindalco, Tata Motors and Jaiprakash Associates gained 4% each. The other prominent gainers for the day were Wipro, DLF, HDFC, Hindustan Unilever, Jindal Steel, Tata Steel and Sterlite which added 2% each.
Reliance Communications and Hero Honda down 2% each were the only losers among the Sensex stocks.
Scam tainted DB Realty closed down 4% at Rs 102 while Unitech shed 5% to close at Rs 41.
The market breadth was extremely positive. Of the total 3006 stocks traded on the BSE, 1962 stocks advanced while 951 declined.