Markets in fine fettle; Sensex up 300 points

The market momentum is strong, thanks to strength in banking stocks and a rebound in IT space.

The markets are going strong this afternoon, having recouped the losses of the previous session, led by the strength in banking heavyweights and a rebound in the hitherto-beaten IT stocks. The Sensex is at 22,602, stronger by 327 points and the Nifty is at 6770, up 94 points. The broader markets are also acting in tandem, with the midcap index gaining 1.3% at 7328 and the smallcap index adding 1.3% at 7516. And in a reversal of the trend in the previous session, all the sectoral indices are in the green.

 

The statement by global credit rating agency Standard & Poor's that it may upgrade India's rating outlook if the government that is elected next month addresses some of the country's fiscal and economic challenges through steps such as passing a goods and services tax, may have contributed to the optimism. 

 

Gains in Asian stocks and overnight rally in US stocks also seems to have underpinned sentiment on the domestic bourses. Asian stocks edged higher on Thursday after US industrial production increased more than forecast in March and Federal Reserve Chair Janet Yellen said the central bank remains committed to supporting the economic recovery. Key benchmark indices in China, Indonesia, Hong Kong and Taiwan were up 0.01% to 0.49%. Key benchmark indices in South Korea, Japan, and Singapore were off 0.05% to 0.36%.

 

The markets had a weak session on Wednesday to mark their lowest close in 2-1/2 weeks as IT, realty and infrastructure stocks had seen sizeable profit booking.

 

Hindalco is shining bright with gains of 4.2% at Rs 141 to top the gainer's charts on the BSE. The high-beta Banking and auto counters are also seeing a lot of action. ICICI Bank has strengthened by 3.5% at Rs 1262, SBI has gained 2.9% at Rs 2017 and Axis Bank has added 2.2% at Rs 1463. In the auto pack, Tata Motors has added 3.7% at Rs 426 and M&M has added 2.1% at Rs 996.

 

On the other hand, HDFC Bank has shed 1% at Rs 717 in an otherwise firm market on reports that MSCI has further reduced the weightage of the bank in MSCI India Index. MSCI has cut the weightage as foreign shareholding in HDFC Bank has exceeded the permissible limit. And NTPC has edged lower by 0.6% at Rs 122.

 

The market breadth is strong. Out of 2730 stocks traded on the BSE, there are 1539  advancing stocks as against 1052 declines.