Rate cut hopes, global cues boost markets

SBI top gainer among the Sensex stocks

The benchmark indices ended higher on Monday led by rate sensitive shares on hopes that the central bank would cut key policy rates at its meeting scheduled for tomorrow. The Sensex advanced 304 points to close at 17,144 and the 50-share Nifty ended at 5,200 levels, up 100 points on the back of broad based buying witnessed by all the sectors.

Global stocks rose to their highest in more than three weeks today on expectations that the US Federal Reserve and European Central Bank will provide stimulus to support their struggling economies. The French CAC40 index jumped 0.8% to 3,308, DAX advanced 1% to 6,760 and the FTSE 100 jumped 32 points to 5,660 levels.

The Asian markets also ended higher with Hang Seng, Nikkei and Taiwan advancing 0.5-1.6% each.

Back home, buying was visible across the board. Rate sensitive sector stocks were amongst the top performers of the day ahead of the RBI's mid-quarter policy review. State Bank of India was the top gainer among the Sensex stocks. The stock jumped nearly 5% to Rs 2,031. ICICI Bank also advanced nearly 4% to close at Rs 964, its 5-month high price, after the private sector lender reported 36% year-on-year (yoy) jump in its standalone net profit at Rs 1,815 crore for the quarter ended June 30, 2012.

Tata Motors, Tata Power, BHEL, Larsen & Toubro, Gail India, Sterlite Industries, NTPC, Infosys, Tata Steel, Mahindra & Mahindra, Sun Pharma, Jindal Steel, Cipla, Bajaj Auto, ITC and reliance Industries also closed higher by 1.2-4% each in trades today.

On the other hand, ONGC, Hindustan Unilever and Wipro were among the notable laggards.

All the sectoral indices ended higher. The BSE power index was the top sectoral gainer, up 3.6% or 66 points to shut shop at 1,900. Realty, capital goods, bankex, consumer durables, auto and metal indices also jumped 2-3.13% each.

From the power pack, Suzlon Energy was the top gainer, up 11% to close at Rs 19 after the company said it has redeemed its $360 million of foreign currency convertible bonds (FCCBs) through various instruments. Reliance Infrastructure also advanced 5% to close at Rs 498 after the company said it has started collecting toll charges on Salem-Ulundurpet road in Tamil Nadu.

GMR Infra, Lanco Infra, Reliance Power, JSW Energy, Power Grid Cororation and Siemens also also ended higher by 3-7% each.

Among the individual stocks, SpiceJet rallied 22% to Rs 30.85 on reporting a net profit of Rs 56 crore for the quarter ended June 2012, after five successive quarters of losses. Analyst, on an average, expected loss of Rs 28 crore for the quarter. The private airlines had a net loss of Rs 71 crore in a year ago quarter.

Bharat Electronics tanked almost 7% to Rs 1,146, after reporting 84% year-on-year (yoy) fall in net profit at Rs 19.32 crore for the quarter ended June 2012, due to lower operational income and higher material cost. The state-owned company had a net profit of Rs 123 crore in the corresponding quarter of previous fiscal.

IRB Infrastructure Developers surged over 11% to Rs 126 on reporting a better-than-expected net profit of Rs 142 crore, as against an average analyst estimate of Rs 100 crore for the quarter ended June 2012. The infrastructure company had reported a net profit of Rs 134 crore during the corresponding quarter of previous fiscal.

The broader markets were in-line with the benchmark indices. The BSE mid-cap index jumped 1.5% or 90 points to close at 5,977 and the small-cap index slipped 1.3% to end at 6,440 levels.

The overall breadth was positive as 1,616 stocks advanced while 1,143 declined.