Sensex gains 376 points, IT stocks gain

Sensex gains 376 points, IT stocks gain

Key benchmark indices on Monday surged as a weaker-than-estimated US jobs report eased concern that the US Federal Reserve may accelerate the pace of stimulus cuts.

The BSE Sensex garnered 375.72 points or 1.81 per cent to settle at 21,134.21, its highest closing level since January 1, 2014. The CNX Nifty garnered 101.30 points or 1.64 per cent to settle at 6,272.75, its highest closing level since January 1, 2014.

 The barometer index of the BSE reclaimed the psychological 21,000 -mark, while the 50-unit premia index of NSE settled at their highest level in nearly two weeks alongside Sensex.

Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years, especially India has been one of the biggest beneficiaries of foreign capital flows.

Investors also expect the RBI to keep interest rates unchanged in a bid to support growth after the Index of Industrial Production contracted 2.1 per cent in November.Equities were also buoyed by across-the-board buying on expectations the RBI will keep interest rates on hold after industrial output in November contracted.

In the day's trade, Infosys extended Friday's post-result gains and hit record high. Many other IT stocks extended Friday's gains triggered by Infosys raising revenue growth guidance for FY 2014. TCS and HCL Technologies hit their record high, while Wipro and Tech Mahindra scaled 52-week high.

Bank stocks edged higher after global regulators diluted a planned debt limit for banks amid warnings that the measure would penalize low-risk financial activities and curtail lending. State Bank of India rose 2.31 percent, while ICICI Bank surged 3.66 percent, HDFC Bank up 1.8 per cent and AXIS Bank gained 2.44 per cent.

Commenting on the market, Kotak Securities' Dipen Shah said, “Markets rose sharply on Monday likely buoyed by the weak payroll data in US, which reignited optimism on the Fed taper programme.”

From the broader markets, the BSE Mid-Cap index rose 0.15 per cent to 6,590.88 points and the S&P BSE Small-Cap index rose 0.37 per cent to 6594.32 points. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative with 1,447 stocks on BSE fell and 1,370 shares gained while a total of 146 scrips remained static or unchanged. 

The total turnover on BSE amounted to Rs 2087 crore, as against Rs 2386 crore on January 10, 2014.

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