Markets gain second day: Sensex adds 660 points in two days

Sensex up 1%, Nifty 0.8%; technology and metal lead

Shares climbed for a second session on Friday, buoyed by gains in the global markets that ended their last full week of 2014 on a high after the US Federal Reserve's decision on Thursday to hold on to lower rates for longer.

The BSE Sensex ended the day up one per cent, or 245 points, at 27,371, led by gains in technology and metal stocks. The National Stock Exchange Nifty closed at 8,225, up 0.8 per cent.

Buying was prompted by the positive sentiment in the global markets, which were up on the ongoing recovery in the US economy. Major US indices were up between two and three per cent each. Asian market indices gained two per cent each. But European markets remained subdued and most indices ended down one per cent each.

Daljeet Singh Kohli, the head of research, IndiaNivesh Securities, said, "What we saw on Friday was a bounce-back in the market. There was too much pessimism, stocks declining on falling crude oil prices and worries about global recovery. Investors were just looking for an opportunity to buy in again."

The rupee depreciated against the dollar, boosting the technology stocks. KPIT, up 5.9 per cent, was the best performer stock in the information-technology (IT) pack. Mphasis and Oracle Financial Services were up three per cent each. The BSE IT index was up two per cent.

The surge in metal stocks was due to the cheaper valuations, as many had been beaten on weak demand growth in the Chinese economy.

Dipen Shah, the head of PCG research, Kotak Securities, said, "Recent macroeconomic data from China have not been encouraging. We saw that reflected in the metal stocks that had fallen sharply. This is nothing but bottom-fishing by investors in the absence of any immediate trigger for buying."

The index, however, pared some gains during the last hour when the government's attempt to table the Goods and Services Tax (GST) Bill in the Lok Sabha was resisted by the opposition. The Bill was tabled in the lower house of Parliament after market hours.

Kohli said, "The statements by the finance minister on GAAR and the justification for the petroleum products' excise duty rise were taken negatively by market participants. This led to some selling during the second half of the session."

Foreign portfolio investors (FPIs) were net sellers on Friday, selling equities of Rs 668 crore.  The domestic institutions came to the rescue, buying equities of Rs 622 crore in the net.

All sectoral indices, except realty, automobile and consumer durables, rose a per cent, with technology, metals and energy stocks gaining the most.

Among the Sensex stocks, ICICI Bank was the highest gainer, followed by Hindalco, Coal India, Wipro and Tata Power.