JOIN USMarkets surge on positive global and local cues
Key benchmark indices surged to reach their highest closing level in almost 23 weeks as European stocks rose on growing optimism that the European Central Bank (ECB) will take steps to bring down borrowing costs for debt-laden European countries, apart from some brisk buying by foreign institutional investors (FIIs) and probable diesel price hike.
Net purchases by FIIs stood at Rs 323 crore on August 17, while their cumulative purchases were Rs 4,931.80 crore between August 1 and 17, indicating a firm trend.
The rally also came on hopes of a possible diesel price hike. Another trigger for the day's rally was a report from Chinese state-run Xinhua news agency's Economic Information Daily that Beijing is planning new economic stimulus for the second half of the year.
The market breadth was positive as benchmark indices ended on a strong note hitting their highest levels in 23 weeks, led by heavyweights such as Infosys, HUL and HDFC. Reliance Industries (RIL) edged lower during the day while ITC pared intraday losses in late trade.
Commenting on the rally, India Infoline's Amar Ambani said: “Strong FII inflows, coupled with upbeat global markets lifted the NSE S&P CNX Nifty to 5,400 while the BSE Sensex moved closer to 18,000,” but added, “There is a fair chance that the key indices could lose steam if the Government fails to act on long-pending reforms besides addressing the overall governance deficit issue.”
The Sensex jumped 194.18 points or 1.1 per cent to settle at 17,885.26, its highest level since March 14, 2012; with the intraday gain being 207 points.
The Nifty rose 54.70 points or 1.02 per cent to close at 5,421, its highest closing level since 14 March 2012. Sectoral indices however, underperformed the Sensex; the BSE Midcap Index rose 0.24 per cent and the BSE Smallcap Index gained 0.52 per cent.
The market breadth was positive with 1,504 advances and 1,355 declines, while 135 remained unchanged. The total turnover stood was Rs 1926 crore, lower than Rs 2146 crore last Friday.
Meanwhile, European stocks rose on hopes that the European Central Bank (ECB) will take steps to bring down borrowing costs for debt-laden European countries. Benchmark indices in the UK, France and Germany were up by 0.32 to 0.67 per cent.
Stocks at Asian markets witnessed a mixed trend, as investors were probably awaiting news from the US and Europe. Benchmark indices in Singapore, and Taiwan were up by 0.12 to 1.01 per cent, but Hong Kong, South Korea and Japan fell by 0.02 to 0.16 per cent. Stock markets in Malaysia, Indonesia and the Philippines were closed on account of public holidays.