Gas price hike triggers biggest rally in stocks

Gas price hike triggers biggest rally in stocks

Sensex up 520 points, Nifty 160 points

Gas price hike triggers biggest rally in stocks
Key benchmark indices surged for the second straight day to end over 2.5 per cent higher on the back of firm global cues and the UPA-government's  announcement on doubling the price of natural gas that triggered a rally -- by far the biggest in calendar 2013 -- following a buying spree in energy shares and shortcovering in financials.

The BSE Sensex rose by 519.86 points or 2.75 per cent to 19,395.81, its highest closing level since June 10, 2013, while the 50-unit CNX Nifty at NSE increased 159.85 points or 2.81 per cent to 5,842.20, its highest closing level from June 17, 2013.

Optimism that the Federal Reserve will not rush to rein in its stimulus measures fuelled a rally in global stocks, while investor sentiment got a boost from the rupee gain on Friday which retreated from a record low hit on Wednesday.

Further, bank stocks gained, while scrips of non-banking finance companies (NBFC) were in demand as a number of companies announced their plans to apply for a banking licence. 
Commenting on the market, Kotak Securities' Dipen Shah said: “Markets ended the week with a strong move on Friday. The day’s move was on the back of the Government reforms initiative of increasing gas prices and setting up of a coal regulator...further initiatives from the government to remove administrative and procedural obstacles in other investment-led sectors could lead to further positive sentiments in the markets.”

From broader markets, the BSE Mid-Cap index rose 2.26 percent to close at 5,964.50 and the BSE Small-Cap index gained 1.37 percent to settle at 5,643.52. Both these indices underperformed Sensex.

Asian stocks edged higher tracking an overnight rise in global equities on easing fears of an early end to US monetary stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Taiwan, Singapore and South Korea were up 1.04 to 2.26 per cent.