Sensex gains 61 pts amid hopes of speedy reforms by PM

Extending its gains for the second straight day, the Sensex today advanced by 61 points led by metal and power stocks amid hopes of faster economic reforms with Prime Minister Manmohan Singh himself taking over the additional charge of Finance Ministry.

The BSE benchmark index, which had gained about 24 points in the previous session, scaled the key 17,000 level in early trade on positive Asian trends. After trading in a narrow 122-point range, the index finally closed at 16,967.76, up 61.18 points or 0.36 per cent.

Sensex's gains were led by Tata Steel, Tata Power, Sterlite Industries, Sun Pharma and Hindalco that rose in 1.3-2.5 per cent range. Around 22 counters gained in the 30-share index. Similarly, the 50-share National Stock Exchange index Nifty rose by 21.10 points to 5,141.90, after touching the day's high of 5,160.10.

Brokers said the market breadth was positive on optimism that Singh would take steps to stem the rupee's slide and revive the faltering economy after taking charge of the finance portfolio.

"Investors expect strong reforms from PM Manmohan Singh," said RMN Finance head Rajiv Malik. Pranab Mukherjee yesterday resigned as Finance Minister to contest the Presidential polls next month.

Analysts said hopes of economic revival are being built up in markets as Singh in 1991 had firmly put the economy on reform path. Investors have reason to believe that Singh would do an encore of 1991, they added.

The BSE-Metal index gained the most by rising 1.55 per cent to 10,409.06 points. It was followed by BSE-Power index gaining 1.03 per cent to 1,911.99 points on expectations the recent power tariff hike in Delhi would improve earnings. Meanwhile, the rupee was trading weak at 57.10 levels against the US dollar after closing at 57.02 yesterday.

Most of the Asian stocks ended higher after upbeat data on housing market in the United States, the world's biggest economy. Key benchmark indices in Singapore, Japan, Taiwan and Hong Kong ended higher by 0.63 per cent to 1.28 per cent while China's Shanghai Composite and South Korea's Kospi indices declined by 0.01 per cent to 1.03 per cent respectively.

European stocks were trading mixed as indices in France and London inched up by 0.38 per cent and 0.22 per cent respectively while Germany's DAX was marginally down.

Back home, major Sensex gainers were Tata Steel (2.51 pc), Tata Power (2.25 pc), Sterlite Industries (1.79 pc), Sun Pharma (1.34 pc), Hindalco Industries (1.30 pc), Coal India (1.24 pc), TCS (1.14 pc) and Infosys (1.07 pct). Among losers, Tata Motors dropped by 3.06 per cent while Bharti Airtel, Wipro, M&M, SBI and Reliance ended marginally lower.

Talking about the Nifty future outlook, Puneet Kinra, Senior Technical Analyst, Bonanza Portfolio said: "Nifty traded in a narrow range of 5130-5160, and once again managed to close above 5100 level. If it sustains above this level, then further rally is likely."

The market breadth continued to rule firm as 1,462 shares ended higher while 1,309 scrips closed lower compared to yesterday. The total turnover rose to Rs 1,634.90 crore from yesterday's close of Rs 1,562.39 crore.

Foreign institutional investors (FIIs) bought shares worth Rs 13.03 crore (net) yesterday as per provisional data from the stock exchanges.