Reliance stocks lift Sensex

Markets surge on possible Ambani settlement

Share prices resumed their rising trend on Friday and hit a new 11-week peak, helped by reports that the Ambani brothers were close to a settlement and the finance ministry planning a 20 per cent disinvestment in Nalco.

Powered by the huge surge in Reliance stocks, the Bombay Stock Exchange Sensex rose to a two-and-a-half month high of 6,748.85, gaining 93.29 points at close and the BSE market capitalisation touched Rs 17,93,759 crore, its highest ever.

"The index should touch 7,000 points this month," said an ecstatic broker.

Not everybody, however, shared his enthusiasm. Vikram Kotak, president, Techoshares and Stocks, said, "While the Ambani settlement would be a big positive, factors like high oil prices and the monsoon uncertainty will weigh down markets."

Reliance Industries, with a weight of 10.6 per cent in the Sensex, rose 4.4 per cent to Rs 552.90, while Reliance Energy rose 3.3 per cent to Rs 530.05.

RIL's GDR was also the biggest gainer in the morning trade today, up 4.74 per cent to $26.10. The trading volume was also substantially high, with over 160,000 GDR trading in the early hours.

The Reliance group's total market capitalisation today went up by 4.24 per cent or Rs 3,832 crore from Rs 90,526 crore to Rs 94,357 crore. Reliance Capital gained 5.11 per cent from Rs 198.70 to Rs 208.85, while IPCL gained 3.56 per cent from Rs 164.50 to Rs 170.35. Reliance Industrial Infrastructure had the sharpest rise of 5.22 per cent (Rs 7.05) today from Rs 135.05 to Rs 142.10.

Foreign institutional investors were net buyers while domestic mutual funds were net sellers. National Aluminium gained 3.7 percent to close at Rs 146.50 after news of the a 20 per cent stake sale, though the mines minister insisted the sale would not happen.

Bank stocks also surged after the finance minister said it expected banks' bad loans to fall to 2 per cent of their total loans portfolio. Punjab National Bank rose 3.6 per cent to close at Rs 388.35, while State Bank of India gained 1.1 per cent to Rs 662.25.

The buying spree spread to other frontline stocks also with 23 of the 30 share BSE basket stocks ending positive. Among other big gainers, the Zee Telefilms scrip was up 4.97 per cent to Rs 147.95, Wipro was up 3.10 per cent to Rs 722.50 and Infosys was up 2.61 per cent to Rs 2258.80.

An equity dealer with a domestic broking firm said, "Today's gain has caught everyone by surprise as marketmen were expecting a further correction in the absence of any fresh impetus."