Sensex spurts 506 pts on govt move to pacify taxation worries

The benchmark BSE Sensex today bounced back by 506.28 points to reclaim the 27,000-mark on government's move to mollify overseas investors' taxation worries and rupee's recovery.

The 30-share index's biggest gain in more than a month was also supported by value-buying in beaten-down stocks, drop in oil prices and gains in global stocks, traders said.

The rupee rebounding from 20-month lows to regain 63 levels too boosted sentiments and helped Sensex recover from its 6-1/2 months low, they added.

"Government’s move to set up a high level committee to decide MAT issue has helped market today. This could reduce FII’s concerns over the medium-term," said Vinod Nair, Head of Fundamental Research at Geojit BNP Paribas Financial Services.

Snapping three days of losses, the BSE Sensex resumed on a strong footing and quickly recaptured the crucial 27,000-mark to touch the day's high of 27,196.28.

It finally closed at 27,105.39, a jump of 506.28 points or 1.90 per cent. Previously, it had soared by 517.22 points on March 30.

The gauge had lost 891.48 points in the previous three days to hit 6-1/2 months low on persistent worries over MAT and delay in passage of key reforms bills in Parliament.

The 50-share NSE Nifty after crossing the 8,200-mark, touched a high of 8,224.95 before closing 134.20 points or 1.67 per cent higher at 8,191.50.

Sentiments changed for the better after Finance Minister Arun Jaitley yesterday announced that a high-level committee will look into the issue of Minimum Alternative Tax (MAT).

Tata Motors was the biggest gainer on the Sensex, followed by Cipla, ICICI Bank, Hindalco, Bajaj Auto, HDFC Bank, HDFC, Axis Bank, RIL, Tata Power, L&T and ITC.

Share of FMCG major Hindustan Unilever rose 3.34 per cent after it reported a 16.73 per cent increase in its standalone net profit at Rs 1,018.08 crore for the March quarter.

Bucking the trend, Hero MotoCorp was down 2.23 per cent after it reported a 14.05 per cent decline in net profit.

A firming trend at other Asian bourses following overnight gains in the US markets and a higher opening in Europe were other factors behind rebound in stocks, traders said.

Sectorwise, the BSE realty gained the most by surging 4.06 per cent, followed by auto by 2.67 per cent.

Meanwhile, foreign portfolio investors sold shares worth Rs 1,360.69 crore yesterday as per provisional data.

Yesterday's battered banking stocks were in the limelight with ICICI Bank, HDFC Bank, Axis Bank and SBI adding about 180 points in total to the Sensex kitty.

Meanwhile, Foreign portfolio investors sold shares worth Rs 1,360.69 crore yesterday, as per provisional data.

"Surprise victory of David Cameron’s Conservative Party in the UK elections has further lifted sentiments," said Jignesh Chaudhary, Head of Research at Veracity Broking Services.

Overseas, Asian stocks closed mixed on signs of global bond markets stabilising after a big sell-off in the past few days.

Key indices in China, Hong Kong, Japan and Singpaore ended up by 0.45 to 2.28 per cent while indices in South Korea and Taiwan moved down between 0.12 and 0.26 per cent.

European markets were trading higher as key indices in France, Germany and the UK firmed up by 0.70 per cent to 0.82 per cent.

Turning to the domestic market, other gainers on the Sensex were ICICI Bank with a rise of 4.09 per cent, Cipla 4.03 per cent, Hindalco 3.50 per cent, HUL 3.34 per cent, HDFC Bank 3.26 per cent, Bajaj Auto 3.02 per cent, Axis Bank 2.80 per cent, HDFC 2.66 per cent and RIL 2.36 per cent.

Among the BSE sectoral indices, realty rose by 4.06 per cent, auto 2.67 per cent, bankex 2.23 per cent, healthcare 1.76 per cent, consumer goods 1.76 per cent, FMCG 1.59 per cent and refinery 1.16 per cent, while consumer durables dropped by 1.60 per cent.

The market breadth turned positive as 1,871 stocks ended with gains, 823 stocks finished in the red, while 124 ruled steady.

The total turnover moved down to Rs 2,960.28 crore from Rs 3,182.30 crore yesterday.