Sensex up 419 pts on global cues

After a dull week, the first day of the July series on Friday saw the Bombay Stock Exchange (BSE) sensitive index, or Sensex, rise 419 points to 14,764.64 on the back of positive global cues, a report from Tokyo-based Nomura Holdings that Indian stocks were “fairly valued” and arrival of monsoon in some states.

During the week, the Sensex was unable to take any direction. Last week’s unfavourable judgment for Reliance Industries Ltd (RIL) in the K-G basin gas sale case continued to hurt the stock in the initial part of the week. Also, ONGC was hit by worse-than-expected results and reduction in the stock’s weight in the Nifty. The World Bank’s report presenting a grim picture of the world economy and delay in monsoon added to the weak sentiment.

The futures and options (F&O) expiry on Thursday saw a low rollover as market participants preferred to stay light ahead of the Union Budget on July 6.

However, there was some positive news in the last two days. The US markets perked up on Thursday after the Federal Reserve’s positive posturing about key indicators. Both Nasdaq and Dow Jones closed 2.08 per cent up.

On Friday, Nomura Holdings’ report that Sensex was expected to grow 14 per cent (from yesterday’s close) in the next 12 months brought cheer to market participants.

Anita Gandhi, head (institutional business), Arihant Capital Markets, said, “There were positive cues from global markets. Insurance companies and pension funds were buyers on Friday.”

In the morning, the market was range-bound for some time, but rallied in the afternoon due to strong opening in the European markets. Sectors like banking, which was underperforming for the last few days, put up a good show on Friday.

Only the healthcare index was down (1.49 per cent) due to 12.17 per cent fall in the price of Sun Pharmaceuticals and 4.37 per cent fall in the Ranbaxy Labs scrip.

Other indices closed in the positive. The Bankex was up 4.3 per cent, followed by capital goods (4.17 per cent), information technology (3.64 per cent) and consumer durables (3.17 per cent).