Sensex registered its sharpest 8-day rally in the last one year to gain 2.5% on Friday and the rupee appreciated sharply, shrugging off higher-than-expected August inflation, after the government's bold move to increase diesel prices and the US Fed's announcement of a third round of quantitative easing sparked off a rally in global stocks.
Today, the BSE Sensex has surged 443 points to closed at 18,464, rallied 1,151 points in the past eight trading days between September 6 and September 14, reporting its highest rise since June 2011. The National Stock Exchange (NSE) S&P CNX Nifty closed at 5,578 has surged 352 points during the period.
“The BSE Sensex rallied 2.5% today in response to the government's first major move to curb fiscal deficit by raising diesel price and announcement of economic stimulus by the Federal Reserve,” said Mr. Sanjeev Zarbade, Vice President (Private Client Group Research), Kotak Securities.
“The markets would now be focused on Reserve Bank of India’s monetary policy meet on Monday and the government reforms measures to be announced today. Post the run-up, valuations are in a fair zone but liquidity support may keep the market momentum going in the near-term,” added Mr. Sanjeev Zarbade.
"The Federal Reserve announced a third stimulus plan (QE3), the government hiked diesel prices which is big act of breaking policy paralysis. Market was waiting for such an event and hence the market rose by 420 points,” said Mr. Kishor P. Ostwal, CMD, CNI Research.
"The positive momentum is likely to continue up till the US elections, which is scheduled in the first week of November," said Jagannadham Thunuguntla Strategist and Head of Research, SMC Global Securities Ltd.
| Sharpest Sensex rally since 2009 | |||
| Date | Sensex close | Points gain | No. of Days |
| May 19, 2009 | 14302.03 | 2429 | 2 |
| April 15, 2009 | 11284.73 | 1717 | 4 |
| March 31, 2011 | 19445.22 | 1606 | 3 |
| June 30, 2011 | 18845.87 | 1295 | 6 |
| June 2, 2009 | 14874.91 | 1286 | 2 |
| September 15, 2010 | 19502.11 | 1281 | 1 |
| September 14, 2012 | 18464.00 | 1151 | 8 |
| Data complied by BS Research | |||
The foreign institutional investors (FII), who were net sellers in the previous calendar year, have turned net buyers in the current year. FIIs have net bought close to $13 billion or Rs 65,954 crore so far in 2012, the Sebi data shows.
The financial sector is the largest contributor in the current rally, contributing 329 points, followed by information technology (218 points), oil and gas (157 points) and automobiles (130 points).
Top five companies – ICICI Bank, Infosys, Reliance Industries, Larsen and Toubro and Tata Motors have contributed a combined 658 points or 57% to the 1,151-points rally in the Sensex. And including these five stocks, top ten companies contributed 77% (896 points) of the benchmark index rally.
ITC, Cipla, Bharti Airtel and BHEL however, contributed 16 points fall in benchmark index during the period.
| Company |
Price on BSE in Rs | ||
