Sensex up 135 points at 9,686

RBI's higher GDP growth forecast triggers market rally.

The bulls took a firm grip on Indian markets on Wednesday, pushing the benchmark BSE Sensex past the 9,700-point mark for the first time.

The Sensex peaked in afternoon trades to 9,714.48 points amid buying in ONGC, Bajaj Auto, Hero Honda, ICICI Bank and Larsen & Toubro.

Even though the level could not be sustained, the Sensex managed to register a new closing high of 9,685.74, rising by 136 points or 1.4 per cent. The 50-share Nifty on the National Stock Exchange rose by 37.50 points at 2,945.50 but ended with gains of 32 points or 1.11 per cent at 2,940.35.

The rally came on the back of firm Asian markets. A smooth rollover of derivatives contracts also helped sentiments but the real trigger was possibly the Reserve Bank of India's upward revision of the economic growth estimate to 7.5-8 per cent.

A drop in international crude oil prices also lifted the sentiments of investors. Across-the-board buying was seen in the auto, FMCG, capital goods, hotel, tech and pharma stocks.

A leading stock broker pointed out that while corporate earnings had not been great, the higher GDP growth projection by the RBI played a role in the rally.

Even though the Indian market is one of the most expensive in the world, brokers expect the index to test the 10,000-point mark in the run-up to the Budget in end-February.

The market on Wednesday also witnessed short covering which propelled stocks to put indices into a new orbit. Among the main drivers of the rally, L&T rose 4.95 per cent at Rs 2,038, ICICI Bank, 4.52 per cent at Rs 597, Dr Reddy's Laboratories, nearly 4 per cent to 1,082.65, HDFC, 3.99 per cent at Rs 1,281, and ONGC, 2.33 per cent at Rs 1,276.

The turnover on the BSE was up by 13.7 per cent. All sectoral indices ended on a higher note. However, the broader market was negative. Of the 2,589 stocks traded on the BSE, 1,536 declined, 988 advanced and 65 remained unchanged.

On the NSE, 465 stocks advanced against a decline of 783 stocks while 16 remained unchanged. The BSE capital goods index was the biggest gainer, rising by 2.83 per cent.

The FMCG index was up by 2.04 per cent, pharma, 0.85 per cent, and automobiles, 0.98 per cent. In the capital goods sector, Alfa Laval rose by 10.18 per cent at Rs 1,175, Jyoti Structures, 9.63 per cent at Rs 385, Bharat Electronics, 7.32 per cent at Rs 1,193, and Esab India, 6.16 per cent at Rs 464.

KEC International, Batliboi, Asian Electronics, Honeywell Automation and Reliance Industrial Infrastructure were up 5 per cent each.

Among the losers, the SBI shed 1.78 per cent to Rs 885 and Grasim, close to 1 per cent at Rs 1,416, on disappointing third quarter numbers. Banking stocks were particularly hit with UTI Bank losing 4.6 per cent at Rs 325.35 and OBC shedding 4.58 per cent at Rs 242.80.

Tata Motors surged by 1.85 per cent to Rs 676, Hero Honda rose by 2.88 per cent to Rs 862 and Bajaj Auto advanced by 3.22 per cent to Rs 2146.

The FMCG brigade was led by Colgate which surged by 20 per cent to Rs 340. HLL gained by over 4 per cent to Rs 196 on the news of the company forming a new management committee on March 1. ITC climbed by 2 per cent to Rs 158 and Nirma by 1.56 per cent to Rs 454.