The BSE Sensex surged by over 350 points to close the day at a one-month high of 16,165.09 points on buying support triggered by upgrading of India’s rating to ‘investment grade’ by Moody’s and likely rate cuts by the Reserve Bank of India (RBI). The rally was led by Reliance Industries (four per cent) and ICICI Bank (3.9 per cent), which, together, added over 100 points to the jump.
In across-the-board buying, all 13 sectoral indices closed higher by 0.6-4.2 per cent. While realty, banking, metal, auto stocks were among the biggest gainers, HDFC, L&T, ITC, SBI, M&M, Infosys Tech, Bharti Airtel, Tata Motors were the other significant stocks that rose.
The 30-share index resumed higher on the back of positive Asian advices, following better closing on the Wall Street yesterday. It got a further boost when the news of Moody’s upgrading India’s rating filtered in. The key index never looked back and surged all the way to settle at 16,165, showing a sharp rise of 350.4 points, or 2.2 per cent. This is highest closing level since December 9.
The 50-issue Nifty of the National Stock Exchange also flared up by 106.8 points, or 2.3 per cent, to a one-month high of 4,849.6.
“The markets opened with a positive gap on favourable global cues. The US markets have closed in positive territory overnight. Interest rate-sensitive sectors such as banking, realty and capital goods stocks were active on Tuesday on hopes the RBI may lower rates in the upcoming monetary policy on January 24,” said Shanu Goel, research analyst, Bonanza Portfolio.
Asian markets ended firm on optimism that US economy is weathering Europe's sovereign-debt crisis. Key benchmark indices from China, Hong Kong, Japan, Singapore, South Korea and Taiwan ended up between 0.4-2.7 per cent, European indices, too, were trading higher by one-two per cent in their afternoon deals.
Among the sectoral indices on BSE, realty spurted 4.2 per cent, consumer goods 3.6 per cent, Bankex 3.2 per cent, Metal three per cent, auto 2.9 per cent and oil & gas 2.7 per cent. Buying was was seen in second-line stocks for the second day. The BSE Small-cap and BSE Mid-cap indices rose 2.6 and 2.2 per cent, respectively. The total market breadth on BSE was strong, as 2,137 stocks closed in the green, as against 671 that ended in the red. The total turnover shot up to Rs 2,555.4 crore from Rs 1,986.31 crore yesterday.
