Benchmark share indices surged on Wednesday tracking rally in global equities on hopes that the European Central Bank which meets later today would announce measures to revive the economy in the euro zone.
The 30-share Sensex provisionally ended up 404 points or 2.5% at 16424 and the 50-share Nifty ended up 134 points or 2.8% at 4,997.
__________________________________________
(Updated 14:28hrs)
Markets extended their gains tracking firm opening of the European markets. Strong cues from Asia followed by buying amongst index heavyweights and rate sensitive shares have also supported the rally.
By 1430, the 30-share Sensex was at 16,440 up 419 points or 2.6% and the 50-share Nifty was at 4,993 up 129 points or 2.7%. The Sensex and the Nifty reached an intra-day high of 16,450 levels and 4,997 mark, respectively.
Meanwhile, the rupee today was at 55.48 against the dollar on the Interbank Foreign Exchange, following a higher opening on the stock market amid selling of the American currency by exporters.
On the global front, Japan's Nikkei average rose on Wednesday, recovering further from Monday's six-month closing low as investors looked to policy makers to counter the euro zone crisis, and Australian and US data offered some positive news. The index was up nearly 2% at 8,534. The Hang Seng index, too, gained 2% while the Shanghai Composite index was down marginally.
European shares and the euro gained on Wednesday as the acute financial problems in Spain and recent data confirming a widespread economic slowdown across Europe fuelled hopes that the region's central bank would respond with stimulus measures. CAC, DAX and FTSE gained between 1-2%.
Back home, all the sectoral indices were trading in positive territory. BSE Auto and FMCG indices surged by 3.5% followed by sectors like Power, Capital Goods, Metal, Banks, Realty, Consumer Durable, PSU and IT, all zooming between 2-3%.
Interest rate sensitive counters were witnessing strong buying demand on expectations that the RBI will cut interest rates at mid-quarter monetary policy review on June 18 to support the slowing economy.
From the Auto pack, Tata Motors was the top Sensex gainer, up over 6%. Hero MotoCorp surged 5%, extending its past two days 2.4% gain on reports that the company proposed to invest Rs 2,575 crore to set up two new plants in Rajasthan and Gujarat and an integrated research and development (R&D) centre. The expansion plans would boost its annual production capacity to nine million from the current seven million, according to the report.
M&M gained over 2%. According to Reuters report, CLSA upgraded Mahindra and Mahindra to "outperform" from "underperform" and raises its 12-month target price to Rs 770 from Rs 720. Maruti Suzuki gained by nearly 3%.
Shares of FMCG companies rallied on hopes of good rainfall this year will help increase farm output, which takes up income, improving sales. The prominent gainers from the space were ITC and Hindustan Unilever, up 4-4.5% each.
Banking shares gained ground on hopes of a rate cut by the Reserve Bank in the upcoming policy review which is scheduled to be announced on June 18, 2012. HDFC Bank, ICICI Bank and SBI were all up between 2-4%.
In the realty segment, DLF was up 2%. Among other realty shares, Sobha Developers, HDIL and Unitech were up 3-7% each.
Metal stocks gained on bargain hunting. Jindal Steel, Tata Steel, Sterlite and JSW Steel up 2-3% were the major gainers.
The other notable gainers among the Sensex stocks were TCS, NTPC, BHEL and Wipro. Index heavyweight, Reliance Industries rose 1%, extending its two day gain.
In the broader markets, the small cap and the midcap indices too extended their gains, both gaining by nearly 1.5% each.
The market breadth in BSE remains healthy with 1,880 shares advancing and 868 shares declining.
