Sensex surges by 467 pts; L&T zooms 6.40%
Mumbai: The BSE benchmark Sensex on tuesday surged by 467 points, the biggest gain in the past three weeks, taking cues from strong global trends, a day before the RBI’s monetary policy review which is widely expected to hold rates.
Brokers also attributed the rally to slight improvement in HSBC Indian Manufacturing Purchasing Managers’ Index (PMI), a measure of factory production, in May.
“The bullish undertone in Indian equities has continued as markets have been rising in anticipation that the present government has the wherewithal to turn around the sagging economy,” said Sanjeev Zarbade, Vice President, Private Client Group Research, Kotak Securities.
Overlooking the GDP data released on last Friday, the 30-share BSE barometer resumed the day strong and soared further to finish one week high of 24,684.85, a rise of 467.51 points or 1.93 per cent from its previous close.
The 50-issue NSE Nifty flared up by 132.55 points or 1.83 per cent to end at 7,362.50.
Construction and engineering giant L&T was the top Sensex gainer at 6.23 per cent after the company announced better-than-expected Q4 results last week-end.
Among BSE sectoral indices, consumer goods flared up by 4.93 per cent, Oil&Gas by 2.85 per cent, power 2.38 per cent, metal 1.86 per cent and realty 1.43 per cent.
Banking stocks notched up smart gains ahead of the Reserve BanK of India’s (RBI) monetary policy review tomorrow.
“Initially, buoyancy on global front provided the needed push and some support also came in from reports that FIIs bought shares worth a net Rs 2,977.62 crore on May 30, 2014, as per provisional data from the stock exchanges,” said Jayant Manglik, President, Retail Distribution, Religare Securities.
Globally, Asian stocks advanced today after a gauge of China’s manufacturing expanded at the fastest pace this year. Key benchmark indices in Japan, Singapore and South Korea closed in the green, while China, Hong Kong and Taiwan markets were closed today for a holiday.
Jignesh Chaudhary, Head of Research, Veracity Broking Services, said: “Local equities traded strong with the help of some blue-chip companies like L&T and SBI gained on hopes that the RBI may start cutting rates sooner than expected and some hint will be given this week.”
India’s manufacturing sector growth inched up in May to
51.4 from 51.3 in April, according to the HSBC Indian Manufacturing Purchasing Managers’ Index (PMI), a measure of factory production.
A PMI reading above 50 indicates growth while a lower reading means contraction.
“Participants are now eyeing RBI monetary policy which is scheduled on Tuesday, its first exercise after the installation of the new union government.
And, majority expects that the RBI is likely to keep rates unchanged this time. So, rate sensitive sectors like banking, capital goods and realty are likely to remain in focus in the next session as well,” said Manglik.
Of 30 Sensex stocks, 24 scrips ended with gains while others finished with losses.
Major gainers included Bharti Airtel at 5.52 per cent, ONGC 5.17 per cent, Tata Steel 4.42 per cent, SBI 4.23 per cent, Axis Bank 3.59 per cent, HDFC Bank 3.26 per cent, Maruti Suzuki 3.06 per cent, Gail India 2.86 per cent, ICICI Bank 2.80 per cent, BHEL 2.50 per cent, HDFC 2.31 per cent, Infosys 1.92 per cent, RIL 1.84 per cent and Tata Motors 1.58 per cent.
Dr Reddy’s Lab declined by 1.96 per cent, Sun Pharma by 1.38 per cent and ITC by 1.32 per cent.
Total market breadth remained positive as 2,001 counters finished with gains, while 977 ended with losses. Total turnover dropped sharply to Rs 3,619.14 crore from Rs 10,538.47 crore last Friday.