Buoyed by positive global cues and continued buying by institutional investors, the Sensex On Wednesday recouped early losses and closed the first day of the new financial year with a 2 per cent gain.
Although On Wednesday’s surge is attributed to the ongoing buying spree of institutional investors, especially insurance companies, market experts have not ruled out volatility during the next couple of weeks before the general elections.
Led by housing finance major HDFC, ICICI Bank and Reliance Industries (RIL), the 30-share benchmark index of the Bombay Stock Exchange (BSE) closed 193.49 points up at 9901.99 points, while the 50-stock Nifty gained 1.30 per cent to settle at 3060.35.
| Top Sensex Gainers | ||
| Price (Rs) | % chg* | |
| Ranbaxy Labs | 178.4 | 7.7 |
| HDFC | 1505.8 | 6.7 |
| Reliance Infras | 549.6 | 6.6 |
| DLF | 176.7 | 5.7 |
| ICICI Bank | 349.5 | 5.1 |
| Infosys Techn | 1375.5 | 3.9 |
| Tata Power | 794.6 | 3.8 |
| Reliance Ind | 1579.5 | 3.7 |
| ONGC | 803.9 | 3.1 |
| Reliance Com | 180.0 | 3.1 |
| * over previous close | ||
Despite a clear slowdown in the real estate sector, the BSE realty index On Wednesday booked huge gains by jumping 5.41 per cent, with HDFC and DLF gaining 6.7 per cent and 5.68 per cent respectively. IT, Oil & Gas and Bankex stood as the next biggest sectoral gainers. ICICI Bank shares rose by over 5 per cent, while the country’s largest private sector firm, RIL, gained about 3.7 per cent on BSE.
“The market will see a gradual uptrend in the coming days amid volatility before elections. Foreign institutional investors (FIIs) are still buying, but cautiously. Also, insurance firms tend to deploy their premium collections in equities around this time, which will help the Indian market hold on to its higher levels without much difficulty. The parliamentary polls will clear a lot of uncertainties,” said Anand Rathi Securities’ Senior Vice-President (Equity) D D Sharma.
FIIs and domestic institutions together bought shares worth about Rs 185 crore On Wednesday, as per the provisional data on BSE.
According to Jyoti Jaypuria, India Research Head of DSP Merrill Lynch, “The year gone by was a bad year in line with global markets, but it must be viewed in the context of a long and secular bull run in the preceding few years. While India is reducing rates, announcing stimulus packages and releasing liquidity, the reality is that earnings are falling and FY10 may see a marginal fall in corporate earnings.”