Positive global cues, rain revival push Sensex 388 points up

Shedding monsoon worries and riding on the back of positive global cues, domestic stock market indices closed in the green today. The market opened with an upward gap and sustained it throughout the trading session. 

The Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, gained 387.92 points, or 2.55 per cent, today to close at 15,628.75. 

The CNX Nifty, in line with market analysts’ expectations, crossed the 4,600-level by touching an intraday high of 4,656.30. The index gained 114 points, or 2.52 per cent, to close at 4,642.80. 

G Chokkalingam, director of Barclays Wealth, said: “While the revival of rain will take care of the kharif crop to some extent, prospects for the rabi crop will be better.” 

The rise in the Sensex can be attributed largely to global, including Asian, cues. The Japanese Nikkei surged 3.35 per cent or 342.85 points today to close at 10,581.05, while the Hang Seng added 336.92 points, or 1.67 per cent. Even the Jakarta Composite closed 1.8 per cent up at 2,375.87. 

US markets, too, had ended in the green last week with Dow Jones gaining 155.91 points, or 1.67 per cent, to close at 9,505.96 on Friday. 

Uday Bhanu Thakur, associate vice president of SREI Capital Market, said: “The monsoon has improved and global cues are positive. Moreover, there is no panic due to swine flu. Taking these factors into account, markets traded with a positive bias today.” 

The breadth of the market today was fairly positive. Out of the 2,826 stocks traded on BSE, 2,044 advanced, 715 declined and 67 remain unchanged. All sectoral indices too were in the green today. Rather, seven of them outperformed the Sensex. The realty index led the rally with a gain of 5.09 per cent, followed by consumer durables (3.59 per cent), fast moving consumer goods (3.53 per cent) and capital goods (3.45 per cent). 

The mid-cap and small-cap indices too did better than the Sensex and gained 2.61 per cent and 2.83 per cent, respectively. 

Manish Sonthalia, head of equity at Motilal Oswal, said, “Liquidity in the overall market is good and the market trend is likely to continue like this.” He maintained a positive outlook for the market. 

In the realty space, stocks of Shobha Developers jumped 11.21 per cent, followed by Ansal Infrastructure (7.86 per cent) and Indiabulls Real Estate (7.65 per cent). Analysts tracking the sector said that developers had had a comfortable liquidity situation and prices were on the rise across the country. Some of the brokerage firms had upgraded the sector too, they added. 

In the consumer durables space, Videocon Industries’ stocks were up 11.31 per cent. Adani Power, which debuted last week, declined 0.15 per cent to close at Rs 103.05. 

According to a report by Ambit Capital, the short-term bias for the Nifty has now turned to range-bound and the reversal point is at 4,400 and 4,700 points. “It means that the short-term bias would turn upward above 4,700 and downward below 4,400,” the report added. 

In its technical outlook, the report said that if the Nifty crossed the 4,700-level, it was likely to target 4,850, and if it fell below 4,400, it might plunge to 4,250.