Sensex soars past summit 18k as bulls go bingeing

Buying spree hoists index by 354 points

Bulls took charge of D-Street, on Wednesday, as key benchmark indices, edged higher for the third straight trading session this week, raising over two per cent amid firm global cues on broad-based buying as investors bought stocks across sectors.

For one, world stocks rose after China pledged to help resolve the euro-zone debt crisis.  Secondly, Greek leaders said they will provide written austerity promises in exchange for a European Union-led bailout. Also, data showing sustained buying of desi stocks by foreign funds underpinned investor sentiment in Street.

So much so, the barometer index of BSE surged past the psychological 18,000 mark attaining a highest closing level in more than 28 weeks, while the 50-unit S&P CNX Nifty scaled 29-weeks closing high.

Even as index heavyweight Reliance Industries (RIL) edged lower, the market breadth was strong with the exception of Oil & Gas index, all the other 12 sectoral indices on BSE were in the green.  RIL scrip shed 1.43 per cent to Rs 836.05, off day's high of Rs 855 even as reports maintained that gas output from RIL's D6 block is expected to fall by about 10 per cent to 34 million standard cubic metres a day (mmscmd) by April due to the entry of sand or water in the wells.

Dwelling on the day’s trade, interest rate sensitive auto, realty and banking shares gained as a further decline in inflation in January 2012 reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth.

Auto major Tata Motors hit record high, with the stock extending Tuesday’s gains triggered by strong Q3 results helped by robust Jaguar Land Rover car sales in China and emerging markets. SBI gained 2.37 per cent as it posted 16.37 per cent in profit  On a consolidated basis in Q3, while other bank stocks rose in the range of 4.77 to 8.09 per cent.

Foreign institutional investors (FII) played a key role in the current year as they pumped in more money in the first half of the February itself as compared to January flow. FIIs bought shares worth a net Rs 1030.12 crore on Tuesday, as per initial data from the bourses. They(FIIs) have bought shares worth a net Rs 9588.68 crore in first ten trading sessions this month, which comes on the top of heavy purchases — a net Rs 10,357.70 crore in January 2012 — made last month, as per Sebi data.

Amar Ambani of India Infoline said: As far as India is concerned, the good news is that inflation has cooled off in January, giving elbow room to the RBI to ease its hawkish monetary policy further and support growth. But, overall world equity markets are showing some signs of fatigue this month after a surprisingly strong January.

Elaborating, Ambani points out even as concerns over eurozone remain at the forefront after Moody’s downgraded six European nations and warned the UK on its ‘AAA’ grade, Greece continues to stumble in its attempts to secure more international aid before next month’s scheduled repayment. 

Kotak Securities’ Teena Virmani said: “Sensex moved past the psychological level of 18000 primarily led by interest-rate sensitive sectors, improved FII buying and positive sentiments from the global markets. ” The popular Sensex at BSE jumped 353.84 points or 1.98 per cent to settle at 18,202.41, its highest closing level since August 1, 2011. The index jumped 382.78 points at the day's high in late trade and rose 151.73 points at the day's low in opening trade.

The S&P CNX Nifty at NSE jumped 115.90 points or 2.14 per cent to settle at 5,531.95, its highest closing level since July 27, 2011. The Nifty hit a high of 5,542.10 and a low of 5,460.60 in intraday trade.

From broader markets, the BSE Mid-Cap index rose 2.1 per cent  and outperformed the Sensex, while the BSE Small-Cap index gained 1.48 per cent and underperformed the Sensex.


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