Sensex zooms 390 points to snap 3-day losing streak

Broader markets up 2%; financials, capital goods lead gains

Benchmark shares indices ended 1.5% higher on Thursday snapping a three-day losing streak led by financials following encouraging India growth forecast by the World Bank while delay in interest rates by the US Federal Reserve also boosted sentiment.

The 30-share Sensex ended up 390 points at 26,637 and the 50-share Nifty closed 118 points higher at 7,961.

Indian economy is likely to grow by 6.4% in 2015-16 compared with 5.6% in 2014-15, the World Bank said in its bi-annual South Asia Economic Focus report.

Meanwhile, the minutes of the US Federal Reserve's last policy meeting indicated that it would not raise interest rates until the US economy was sufficiently strong.

The rupee was at 60.96 versus Wednesday's close of 61.39/40 following dovish Fed comments. Almost all Asian currencies were trading stronger versus the dollar.

Global Markets

World stock markets roared their approval on Thursday of reassurances the U.S. Federal Reserve will not rush into raising interest rates, with risk appetite flooding back into almost every asset class.

Minutes of the Fed's Sept. 16-17 meeting published late on Wednesday showed officials were wary about the dual threats of a stronger dollar and recent wobbles in the world economy as they seek an eventual exit from record low rates.

There were big gains for Asia stocks and European shares duly followed suit as Britain's FTSE 100, Germany's DAX and France's CAC 40 rose 0.5, 1.1 and 0.5% respectively in early trading.

Broader Markets

The broader markets also rallied along with the benchmark indices today with both the BSE Mid-cap and Small-cap ending nearly 2% higher.

The BSE Mid-cap index gained 173 points or 1.8% to end at 9,576 while the Small-cap index gained 168 points or 1.6% to end at 10,732.

PSU banks were among the top gainers in the mid-cap segment buoyed by the World Bank's encouraging economic growth forecast for India.

Dena Bank, Maharashtra Bank, Union Bank, Allahabad Bank, United Bank of India, Oriental Bank of Commerce, Federal Bank ended up 3-7% each.

Other significant gainers in the Mid-cap segment include, Amtek India, Den Netowrks, CMC, Monsanto, Raymond and Jyothy Labs which ended up 7-14% each.

The small-cap segment witnessed buying interest in select counters with some of them winning new orders. Ramco Systems surged 5% after it won a $3 million order from UK-based retail major.

Ahluwalia Contracts rallied nearly 4% after it secured new orders aggregating to Rs 178 crore for construction of housing project including finishing &electrical works.

Dishman Pharma ended up 6% following upward revision by rating agency CARE for its long and short term loans and non-convertible debentures.

Other significant small-cap gainers include, NDTV, NCC, Simplex Infra, Ess Dee Aluminium, Gujarat NRE Coke and SRS which ended up 11-17% each.

Sectors & Stocks

On the sectoral front, all sectoral indices, ended in the green on BSE with gains of atleast 0.1%. BSE Capital Goods index was the top gainer up 3% followed by BSE Bankex, Healthcare, Oil & Gas, Metal, Realty and Power indices up 1-2.3%.

Financials shares ended up on the back of encouraging growth forecast from the World Bank. HDFC, ICICI Bank, HDFC Bank, Axis Bank and SBI gained between 2-3%.

In the metal pack, Hindalco was the top gainer, up 6% at Rs 157.5, as global rival Alcoa Inc's earnings beat forecasts, propelled by higher aluminium prices. Hindalco expects similar earnings performance from its overseas subsidiary Novelis Inc, which is the world's largest producer of rolled aluminium products.

Among other metal stocks, Sesa Sterlite and Tata Steel ended up over 1.5% each.

Pharma shares which had witnessed some selling pressure yesterday following reports of US Congress price probe also rebounded and ended with gains. Dr Reddy's Labs and Sun Pharma were up 0.6% and 1.8% respectively.

Cipla climbed nearly 1% after the company said Medpro Pharma has entered into a tie up with Teva Pharmaceuticals affiliate to exclusively sell Teva products in South Africa. Medpro Pharma is a subsidiary company of Cipla Medpro.

Among the technology stocks, Infosys rebounded from Wednesday's nearly 5% drop following a downgrade by Citigroup. The stock closed with a 0.2% gain ahead of its second quarter earnings due tomorrow. TCS was also up 0.6% while Wipro and Tech Mahindra dropped 0.7% and 3%.

Shares of oil companies gained on the back of declining Brent crude prices. Reliance Industries gained 1.8% and ONGC ended up 1%.

Capital goods shares were among the top gainers. L&T extended its yesterday’s rally of 2.3% and ganied 2.6% after the company said its wholly-owned subsidiary L&T Technology Services received approval from the Competition Commission of India to acquire the engineering business of US-based Dell Product and Process Innovation Services.

Meanwhile, Bharat Heavy Electricals Limited (BHEL) jumped 8.4% to Rs 219 after state-run company said it has bagged EPC (engineering, procurement & construction) contract worth of Rs 7,800 crore for setting up a 1,320 MW thermal power project in Tamil Nadu.

On the flip side, NTPC, ITC and M&M were the only prominent losers on the BSE down between 0.2-0.6%.

The market breadth was very positive on BSE. 2,008 stocks advanced while 932 stocks declined.

Smart Moves

Monsanto India surged 8% to Rs 3,083 after the company said the foreign investors have increased their stake in the company by nearly one per cent age points during July-September quarter.

8K Miles Software Services was locked in upper circuit of 5% at Rs 571, also its new high on BSE, after the company reported nearly three-fold jump in consolidated net profit at Rs 4.15 crore for the second quarter, on back of strong operational income.

Ahluwalia Contracts (India) gained 4.5% to Rs 157 after the company said it has secured new orders aggregating to Rs 178 crore for construction of housing project including finishing & electrical works.

Polaris Financial Technologies dipped 13% to Rs 214 after the stock turn ex-scheme of arrangement today. The mid-sized IT firm has fixed October 10, 2014 as the Record Date for the purpose of determining the list of shareholders who are entitled to receive the shares in Intellect Design Arena Limited, the resulting company after the demerger.