The Sensex added 1.2 per cent on Thursday, to close at the highest in four weeks, tracking strong Asia and Europe, with Reliance Industries leading the broad gains aided by a perk up in sentiment.
World stocks rose from a two-week low and the euro rebounded across the board, after Germany’s top court rejected lawsuits aimed at blocking the country’s participation in bailout packages for Greece and other euro zone countries. Reliance Industries, which has the heaviest weight on the main index, extended gains on expectations the energy major would be able to step up flagging gas output off the country’s east coast. The stock closed up 1.46 per cent at Rs 833.50.
BP Plc’s India unit head, Sashi Mukundan said yesterday, the oil giant was confident of raising output from Reliance Industries' KG D6 block. State Bank of India, HDFC Bank and ICICI Bank gained between 0.91 and 3.3 per cent on growing expectations that the central bank may hold rates at its September 16 policy review.
“We are following the European market and high beta-stocks that were badly beaten down are now seeing buying,” said Vikas Khemani, president at Edelweiss Capital. The benchmark 30-share BSE index closed up 202.19 points at 17,065, its highest closing since August 10. The index rose for a second straight day, with 25 of its components closing in the green. Better-than-expected data on the US services sector and Australian growth, as well as speculation that Washington may unveil a $300 billion package to create new jobs, also helped improve the global market sentiment. Cement and construction firm Jaiprakash Associates jumped 7.62 per cent to Rs 71.35 on a newspaper report, that it was in talks with Mexico’s Cemex and South America’s Votorantim Group to sell up to 26 per cent stake in its cement business. A spokesman for Jaiprakash Associates said he did not have an immediate comment.
Realty shares gained with top realtors DLF closing up 2.64 per cent and second-largest Unitech gaining 7.36 per cent on bargain hunting.
Power utilities also rose on value buying. The sectoral index rose more than 2 per cent. Top utility NTPC, private utility Tata Power and Adani Power all closed around 3.5 per cent higher. Foreign funds have bought shares worth $450 million this month until Tuesday after selling about $2 billion in August.
“Nothing has changed fundamentally for India in the past few days. It's just a pullback rally,” said Deven Choksey, managing director at brokerage K.R. Choksey.
The BSE index is down nearly 17 per cent this year as rising interest rates and worries about the health of the global economy drove investors away from risky assets.
The 50-share NSE index closed 1.19 per cent higher at 5124.65 points.
In the broader market, there were three gainers for every declining stock on a total volume of about 745 million shares.
The MSCI’s measure of Asian markets other than Japan was up 2.68 per cent, while Japan's Nikkei gained 2.01 per cent on Thursday.
