Stock markets surged on hopes of a push to domestic economic reforms, positive G-20 talk and firm global markets. The Sensex gained 340 points to end at 16,499 and the Nifty closed at 4,898, up 102 points.
While inaugurating the 25th India Economic Summit in New Delhi, Prime Minister Manmohan Singh stressed the need for more economic reforms, especially in the financial sector, and expressed confidence that 7 per cent growth would be achieved next year.
Also, a meeting of the G20 countries decided to keep interest rates low and to retain the stimulus measures till a full global recovery.
Asian markets closed in the green, Europe did well and the Dow Jones futures pointed towards a positive opening in the US.
The morning session was volatile. The markets opened in the positive, tracking Asian indices, but soon pared gains and momentarily slipped in the red. Strength re-emerged in the afternoon. From here, the indices rose progressively, without hiccups, to close near the day’s high.
The banking sector rallied more than 4 per cent after the prime minister’s remarks. SBI and ICICI Bank rose 5 per cent to Rs 2,319 and Rs 889, respectively, while HDFC Bank gained 4 per cent to Rs 1,706.
Consumer durables, oil & gas, metal, realty and FMCG indices were up over 2 per cent.
Reliance Industries zoomed 3.5 per cent to Rs 2,319 on reports that it was close to a major overseas acquisition. ITC added 4 per cent to Rs 258 and Tata Power advanced 3.7 per cent to Rs 1,320.
With on Monday’s gains, the Sensex has jumped 1,094 points in the past four trading sessions.
However, telecom stocks were weak. Bharti Airtel slumped 4 per cent to Rs 308 and Reliance Communications shed 2 per cent at Rs 174.
The market breadth was strong. Out of 2,792 stocks traded on the Bombay Stock Exchange, there were 1,993 advances and 756 declines.
Mayank Shah, CEO, Anagram Capital, said, “We are headed up, unless there’s some negative news from the US. Having closed above the 4,850 mark, the Nifty is headed to 5,000. But there could be a correction thereafter. Bank stocks rallied during the day on rumours of an increase in the FDI limit and equity infusion in banks.”
