Bulls are back: BSE Sensex up 513 points

Bulls are back: BSE Sensex up 513 points

Greece package, lower oil price are reasons

Bulls are back: BSE Sensex up 513 points

 Brent Crude fell 6 per cent to $107 bbl as the International Energy Agency (IAE), on Thursday, decided to turn on the oil spigot and release 60 million barrels driving down crude prices to four month lows which caught investors off guard and spurred a rally across financial markets.

The popular Sensex at BSE jumped 513 points or 2.89 per cent to settle at 18,240.68 points, its highest closing since June 14, 2011. The S&P CNX Nifty at NSE was up 151 points or 2.84 per cent to settle at 5,471. Broader indices wise, the BSE Mid-Cap index rose 2.26 per cent and the BSE Small-Cap index gained 1.8 per cent. Both these indices underperformed the Sensex.

D-Street analysts point out that likely fuel price revision, duty rejig and talks on under recoveries in the Empowered Group of Ministers (EGoM) meet scheduled this evening had also boosted the rally.

The market breadth was strong, while the strong European cues on Greece news took the upside further in the second half of trade. Besides, the International Monetary Fund’s further austerity measures and comments from China’s premier providing reassurance over inflation also revved up sentiment in the domestic bourses. While the domestic stock markets joined the global market rally, analysts recommend retail investors to be cautious as this could just be a dead cat bounce — temporary recovery from a prolonged decline and investors may get caught on the wrong foot.

They also pointed out that fundamentally things have not changed much with political stalemate in Delhi continuing and RBI to continue with its tightening measures until there are clear signs of inflation easing.  The day’s rally is more with respect to the oil correction, says Amisha Vora of Prabhudas Lilladher. “This is combination of the both — a bit of short covering and reasonable amount of FII figures,” she added.

BSE clocked turnover of Rs 2,815 crore, higher than Rs 2,526 crore on Thursday. The market breadth, indicating the overall health of the market, was strong with as many as 1,980 shares on BSE advanced while 865 shares declined and a total of 115 shares remained unchanged.