Equities rise on nuke deal, Freddie, Fannie bailout
Indian shares on Monday got a boost from the NSG waiver to India-US nuclear deal and rally in Asian and European markets on take over of US mortgage giants Fannie May and Freddie Mac by US government. Market opened with a gap-up mirroring a strong rally in Asian peers. Investors covered shorts and took fresh positions in capital goods, power and banking stocks. But the indices lost momentum towards end of trade as profit booking set in.
Bombay Stock Exchange’s Sensex closed at 14,944.97, up 461.14 points or 3.18 per cent. The index touched a high of 15,107.01 and low of 14,917.06 intraday. National Stock Exchange’s Nifty ended at 4,482.30, up 130 points or 2.99 per cent from Friday. The broader index touched a high of 4,558 and low of 4,358.30 during the day.
BSE Midcap Index closed 1.15 per cent higher at 5819.89 and BSE Smallcap Index advanced 1.12 per cent to 6,982.77. Sterlite Industries (5.88%), ICICI Bank (4.89%), State Bank of India (4.81%), Larsen & Toubro (4.63%) and NTPC (4.58%) were the biggest Sensex gainers. There were no losers in the 30-share index. Analysts don’t expect the market rally to sustain as there are no visible positive triggers to drive the market.
“What happened today was on expected lines. Two events--NSG waiver and bailout of American banks--changed market sentiments. But market will be range-bound from here on and may face pressure 300-400 points on the upside,” said Subramanyam Pisupathi, head of research, Ventura Securities. Subramanyam is of the view that rate sensitive banking sector may move higher from current levels as factors like inflation and interest rates are close to peaking. The BSE Bankex closed 4.06 per cent higher at 7,464.24.
“Banking sector looks promising at these levels as inflation looks peaked out and interest rates may be one step from peaking out. Yield on government paper has come down from 9.15 per cent or thereabouts to 8.5 per cent and that is a good sign. We expect less provisioning in second quarter and may see investments even at these levels,” he added. According to him, euphoria in power stocks is over-stretched and investors may book profits now as fundamentals of these companies won’t be changing so soon.
BSE Capital Goods Index and BSE Power Index, which led the gains in morning, ended 3.70 per cent and 3.36 per cent higher but off highs. In stock specific action, KEC International ended up 4.11 per cent at Rs 424.10 after bagging two orders worth Rs 120 crore from NTPC Electric Supply Company and Rs 97 crore from Power Grid Corporation of India. Shares of Tata Communications ended up 5.37 per cent at Rs 447.40 after the company and BitGravity, a next-generation content delivery network for interactive broadcasting, reported the worldwide launch of Tata Communications’ CDN service..
Dolphin Offshore shares were locked at 20 per cent upper circuit at Rs 281.15 after it won two contracts worth Rs 304 crore from ONGC. Shares of Suzlon Energy gained 4.59 per cent to Rs 235.80 after the company completed 51 MW wind power project for ONGC. Bilpower ended up 3.14 per cent at Rs 170.75 after it signed $30 million contract with the Ghana government for EPC contract for rural electrification. On the BSE, advances numbered 1,665 and declines 1,034. European markets were higher but FTSE 100 had given away some intra-day gains at the time Indian market closed. It was up 1.46 per cent, CAC 40 was up 4.94 per cent and DAX moved 3.57 per cent higher.
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Source:ET
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