Sensex gives Singh 129 point salute

Nifty up 64 points.

The stock market yesterday overwhelmingly endor- sed Manmohan Singh as India's next prime minister. The Bombay Stock Exchange (BSE) Sensex jumped on Wednesday by 2.65 per cent or 129.08 points from Tuesday's close to top the 5,000 level, closing at 5,006.10.

Buying by domestic funds and institutions amid continued volatility helped the Sensex leap 183 points intra-day to the day's high of 5,059.89. Further testifying to the market's confidence, share prices of public sector undertakings (PSUs) recovered from the recent drubbing they had received.

The BSE PSU index was the largest gainer, up 9.21 per cent on bargain buying. Market men said the PSU stock prices went up smartly on hopes that Singh would maintain the pace and fabric of economic reforms. The Bhel scrip was the biggest gainer in the Sensex basket, up 14.76 per cent to Rs 502.30, followed by ONGC, up 9.75 per cent to Rs 701.60. MTNL was up 2.77 per cent to Rs 124.30 and HPCL gained 2.46 per cent to Rs 326.70.

The Sensex has now gained more than 500 points in the last two trading sessions after losing a cumulative 895 points on Friday and Monday, amid fears that the new Congress-led government supported from outside by the Left would stall reforms.

The National Stock Exchange (NSE) Nifty gained 4.25 per cent (63.90 points) to close at 1,567.85.

The capital goods index too shot up, by 6.56 per cent. The BSE consumer durables gained 5.25 per cent, the Bankex was up 5.12 per cent and the TECk index was up 1.93 per cent.

Gainers outnumbered losers 3:1 on the BSE. Yesterday, gainers had outnumbered losers by 2:1. Prices of 20 of the 30-scrip Sensex closed higher. Widespread buying was seen, with traded volumes slightly higher than on Tuesday; the cash market turnover was at Rs 2,402.37 crore on the BSE and Rs 5,309.95 crore on the NSE.

The rupee gained almost 25 paise against the dollar and closed at 45.22. After considerable volatility, bond prices remained virtually unchanged. The yield on the 10-year benchmark paper was 5.18, almost the same as yesterday's yield.

Heavyweights like State Bank of India gained 7.11 per cent to Rs 525.75; Reliance Industries was up 4.29 per cent to Rs 452.25 and Hindustan Lever was up 3.03 per cent to Rs 134.30.

ITC, however, was the biggest loser in the Sensex basket, falling 2.01 per cent to Rs 899.10. Tech bellwether Infosys Technologies was up 1.94 per cent to Rs 4,981.55 and Satyam Computer gained 1.43 per cent to Rs 312.40, though Wipro fell 2.24 per cent to Rs 1,523.20.

Tata Power was up 9.02 per cent to Rs 314.10 and Tata Steel was up 7.32 per cent to Rs 315.10. Bharti Tele-Ventures was up 5.62 per cent to Rs 155 and Gujarat Ambuja Cements was up 4.68 per cent to Rs 298.50. Tata Motors gained 4.72 per cent to Rs 420.70 and Maruti Udyog, whose scrip entered the Sensex basket, was up 4.24 per cent to Rs 466.10.

Market debutante NDTV closed at Rs 99.40, a 42 per cent premium over its offer price of Rs 70.

Brokers added that hopes were high in the market that Manmohan Singh would ensure continuity. This sentiment was further boosted by the central bank holding interest rates steady on Tuesday and indicating that it was in no hurry to raise them.

Firmer global stock markets and signs that global crude oil prices may ease helped the sentiment but market participants said that uncertainty still persisted and that the market was awaiting the new government's common minimum programme before taking a further call.

Meanwhile, foreign institutional investors (FIIs) sold more shares on Tuesday than they bought, with net outflows of Rs 227.50 crore. Mutual funds, too, were net sellers to the tune of Rs 23.61 crore on Tuesday, after eight consecutive buying sessions.

There are fears in the market that higher interest rates in developed economies could trigger an outflow of money, though analysts said India-specific funds invested for the longer term and emerging market funds would continue to stay invested here.