Benchmark indices Sensex and Nifty On Thursday rose 2.25 per cent and 1.72 per cent respectively, taking cues from the rally in US stocks triggered by JPMorgan and Citigroup top executives’ statements that banks had started making profits in America. The Sensex closed the day with a gain of 183 points at 8,344, while the Nifty ended at 2,617, posting a rise of 44 points.
JP Morgan CEO Jamie Dimon had on Wednesday said their bank was profitable in January and February, bolstering speculation that the worst of the banking crisis was over. On Tuesday, Citigroup CEO Vikram Pandit too had written in an internal memorandum that the lender was profitable in the first two months of 2009 and was confident about its capital strength.
On Thursday rally in the domestic market was led by ICICI Bank, which has been the most-battered among Sensex stocks. The stock rose 8 per cent to close at Rs 284.
The share of top car maker Tata Motors rose 6.77 per cent to close at Rs 145 after the British government announced a pound 27 million ($37 million) grant to its Jaguar and Land Rover (JLR) unit. Among others, Reliance Industries (RIL) rose 4.17 per cent to close at Rs 1,201. The spurt in the RIL stock was triggered by the buzz that the Bombay High court would come out with a final verdict in its gas dispute with Reliance Natural Resources (RNRL) on March 16.
However, the share price of Bharti Airtel fell over 6.37 per cent to Rs 550 after its chief executive Manoj Kohli sold his entire holding in the telecom firm.
Domestic market experts, however, are not sure whether this rally would mark the beginning of a bull phase. “While foreign funds have offloaded financial sector stocks in a big way since October 2008, their holdings in capital goods, FMCG and telecom firms are still intact. The share price of these stocks may further decline in the absence of consumer demand,” said Mehraboon Irani, president of equities at Centrum Capital.