Hopes of Ambani truce, IIP data boost stocks

Strong response to Indiabulls IPO adds to euphoria

From European markets and higher US index futures aided rally.  In fact, RIL scrip rose nearly 3 per cent on Anil Ambani’s decision for a truce with elder brother Mukesh. So much so, Nifty rallied over 100 points on the first day of the week and regaining the psychological 5,000 mark, while bellwether index of BSE too surpassed the 17,000 mark again.

The market sentiment in Dalal Street was upbeat after the latest data showing a surge in industrial output in August this fiscal. IIP rose a robust 10.4 per cent in August 2009, which is the fastest pace of growth in 22 months.  Manufacturing output rose 10.2 per cent.  The government had revised upwards industrial production growth for July 2009 to 7.2 per cent from an earlier estimated 6.8 per cent.

Besides, a strong response to initial public offer of Indiabulls Power which was fully bid within half an hour of opening of the issue this day, also aided to lift sentiment. Intraday volatility was high through out the session.  The market surged in early trade after Anil Ambani on Sunday evening called for a renewed effort to end a bitter feud related to the split of the family business empire that spans energy, telecommunications and financial services. Analysts aver that stock and sector-specific activity may dominate trade in the coming days based on expectations on Q2 September 2009 results. Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.

Sensex up
The popular Sensex at BSE was up 384.01 points or 2.31 per cent to close at 17,026.67 points. The bareometer index swung between the day’s of low of 44.66 points to the day’s high of 426.12 points in late trade. The S&P CNX Nifty was up 109.05 points or 2.21 per cent to settle at 5,054.25 in the day’s closing.

However, the broader indices did not move up in line with benchmark indices.  The BSE Midcap index rose 1.22 per cent, while BSE smallcap went up by 1.05 per cent.  Total traded turnover for the day stood at Rs 92,998.89 crore, which included Rs 15,733.94 crore from the NSE cash segment and Rs 5,259.11 crore from the BSE cash segment while Rs 72,005.84 crore from the NSE Future & Options. 

The market breadth, indicating the overall health of the market was strong, was positive with as many as 1,682 shares on BSE advanced while 1,174 shares that declined and nearly 362 shares remained static.  Among the Sensex pack, 27 scrips rose while the rest fell.

Meanwhile during the day  European shares climbed, while Asian stocks were mixed.  Key benchmark indices in France, Germany and UK were up by between 1.22 to 1.42 per cent.
Key benchmark indices in Hong Kong, South Korea were down by between 0.42 to 0.93 per cent, while key indices in Taiwan and Singapore rose by between 0.37 to 1.05 per cent. China’s Shanghai Composite, which jumped 4.8 per cent on Friday slipped 0.6 per cent this day.  The Japanese stock markets were closed.

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