The indulgent festive Christmas-eve buying binge and the loosening of the purse strings by the consumers in the United States seems to have positively rubbed off on the country’s premier bourse — the Bombay Stock Exchange.
With the stronger-than-expected US consumer spending soothing fears of the world’s top economy was heading into a recession providing necessary positive signal trust the raring bulls to sit stoically in silence on the sidelines.
No way. With the gung-ho bulls blazing away in full steam the benchmark 30-share sensitive BSE Sensex soared by a scorching 692 points to end the day at 19,854.12 points.
Biggest gain
Furthermore, back home, with Gujarat Chief Minister Narendra Modi romping home in style to be in the saddle for the third time, provided the necessary fillip to the market sentiment sending the stock prices soaring.
Incidentally, this is the Sensex’s biggest gain since November 14. Likewise, the S&P/CNX Nifty Index on the National Stock Exchange too climbed 218.60, or 3.8 per cent, to close the day at 5,985.10. The Sensex registered its biggest rise in a month following across the board buying support on the bourse with fears of any mid-term elections in the country also being fanned away.
Consumer spending
Likewise, with the US consumer spending rising by 1.1 per cent in November, according to US Commerce Department, global markets too witnessed a strong surge on the back of stronger-than-expected US consumer spending.
While all the sectoral indices rallied sharply, the market surge was, however, ascribed in particular to software scrips, which spurted ahead of the third quarter December 2007 reporting season.
The recently battered IT sector attracted heavy buying support following assurances from Finance Minister P Chidambaram that the government would address the concerns of sectors affected by the rupee’s appreciation against dollar.
Foreign Institutional Investors (FIIs) and operators were engaged in rolling over and shortcovering their positions to next series as December contract of derivaties expires on Thursday, market players opined.
Analysts said market was waiting for a trigger since the Sensex resisted to fall below the 19,066 crucial support level during last week. Asian indices too ended up in a range of 1.0 to 2.6 per cent following a strong two-day rally in US stocks last weekend.
The BSE IT index zoomed by 260.98 points or 6.04 per cent to close at 4,581.61 from last close of 4,320.63. The trading volume, however, was low at Rs 5,694.27 crore compared to Rs 6,259.25 crore on Thursday (last trading day). The broad-based BSE-100 index soared by 347.01 points to 10,782.70 from previous close of 10,435.69.
The BSE-200 index and the Dollex-200 were quoted sharply up at 2,559.06 and 1,080.26 at close compared to Thursday’s close of 2,479.82 and 1,043.37 respectively. The BSE-500 Index gained 244.54 points to 8,240.16 from last close of 7,995.62 and the Dollex-30 ended higher at 4,132.91 from 3,975.85. Incidentally, stocks of Gujarat-based companies rallied sharply on Monday.
Full-fledged SLB
Securities & Exchange Board of India on December 20, cleared proposal to allow short selling by institutional investors. In order to provide a mechanism for borrowing of securities to enable settlement of securities sold short, it also decided to put in place a full-fledged securities lending and borrowing (SLB) scheme for all market participants in the Indian securities market.
