The country’s key stock market indices rose over two per cent on Tuesday, as the rupee’s decline to a two-year low led to buying in the shares of export-driven information technology (IT) firms, coupled with a recovery in European markets after Greece fully paid coupon on its debt.
The Bombay Stock Exchange (BSE) benchmark Sensex gained 2.11 per cent, or 353.93 points, to close at 17,099.28. The 30-stock index touched an intra-day high of 17,135.44.
At the National Stock Exchange (NSE), the 50-stock Nifty climbed 108.25 points to close at 5,149.90, as against the previous close of 5,031.95. The exchange’s volatility index, India VIX, a gauge of traders’ perception of near-term market risks based on options prices, declined 7.94 per cent to 27.25.
| BOUNCING BACK | |||
| Indices | 19-Sep-11 | 20-Sep-11 | % chg |
| Nifty | 5,031.95 | 5,140.20 | 2.15 |
| Sensex | 16,745.35 | 17,099.28 | 2.11 |
| BSE 500 Index | 6,543.86 | 6,656.77 | 1.73 |
| BSE Smallcap Index | 7,211.53 | 7,300.17 | 1.23 |
| BSE Midcap Index | 6,371.73 | 6,429.34 | 0.90 |
| BSE Sectoral Indices | |||
| Top 5 gainers | 40,805.00 | 40,806.00 | % chg |
| IT | 5,052.81 | 5,216.16 | 3.23 |
| Consumer Durables | 6,662.20 | 6,844.82 | 2.74 |
| Bankex | 10,997.69 | 11,252.14 | 2.31 |
| Metal | 12,111.44 | 12,349.68 | 1.97 |
| Oil & Gas | 8,676.02 | 8,844.20 | 1.94 |
| Top 5 Sensex gainers | 40,806.00 | % chg* | |
| Hindalco | 150.20 | 4.31 | |
| TCS | 1,057.90 | 3.94 | |
| SBI | 1,989.05 | 3.78 | |
| Reliance Industries | 851.50 | 3.73 | |
| DLF | 212.20 | 3.46 | |
| * Over previous close Compiled by BS Research Bureau | |||
Major European markets shrugged off Standard & Poor’s downgrade of Italian debt, as sentiment was lifted after Greece fully paid two bond coupons amounting to euro 769 million ($1.04 billion). At 6:30 pm IST, France’s CAC 40 was trading up 1.16 per cent, Germany’s DAX rose 2.17 per cent and UK’s FTSE 100 gained 1.36 per cent. Futures on major US indices – Dow Jones Industrial Average and S&P 500 — were trading higher.
“Greece should be able to get a green light from its international creditors on Tuesday, helping it avert a default in the short term. But, that may not necessarily be the end of its woes or, for that matter, the euro zone’s,” said Amar Ambani, head of research, IIFL, India Private Clients. “For India, the next big catalyst could come from positive policy action or some softening in inflation. Corporate earnings next month will also be key to near-term direction,” he added.
The two-day meeting of the US Federal Reserve’s policy setting panel, which starts on Tuesday, and the political debate over US President Barack Obama’s deficit-cutting measure would also have a bearing on the sentiment in the coming days, Ambani said.
Twenty-eight of the 30 Sensex stocks closed in the green. Hindalco Industries emerged as the top gainer, closing at Rs 150.20, up 4.31 per cent, or, Rs 6.20. Shares of Tata Consultancy Services, State Bank of India, Reliance Industries, DLF, HDFC, Infosys and Sterlite Industries gained 3-4 per cent. Only Bharat Heavy Electricals Ltd (BHEL) and the Oil and Natural Gas Corporation (ONGC) closed in the red, losing 0.81 per cent and 2.86 per cent of their value, respectively.According to data on BSE, foreign institutional investors bought shares worth Rs 318.84 crore on Tuesday, while domestic institutional investors sold shares to the tune of Rs 317.69 crore.
“The outcome of the Fed meeting and its implication will decide the short-term trend of the Nifty, which is likely to consolidate within the 4,900-5,200 range,” said Shanu Goel, senior research analyst at Bonanza Portfolio.
All sectoral indices on BSE closed in the positive. The BSE IT index gained the most, up 3.23 per cent, as the rupee touched a two-year low of 48.25 against the US dollar, closing at 48.06. Indices representing technology, consumer durables and banking shares rose 2-3 per cent. Market breadth was positive on BSE, with two stocks advancing for every declining stock.
Earlier, major Asian markets, except Japan, ended higher. Hong Kong’s Hang Seng gained 0.51 per cent, China’s Shanghai Composite Index rose 0.41 per cent and South Korea’s Kospi added 0.94 per cent. However, Japan’s Nikkei 225 lost 1.61 per cent.
