The Sensex staged excellent performance on Monday, extending Friday’s rally to 500 points in two sessions. The Sensex today went up over 300 points or 1.8% to post a one-week high of 17,143.68, its biggest rally in over a month. Realty, power and capital goods shares were the top gainers rising over 3% while banking stocks rebounded sharply, gaining 2.7%. SBI topped the buying list rising 4.63% today, followed by Tata Motors and Tata Power that rose 4.1% each. ICICI Bank, Bhel, L&T, GAIL and Sterlite rose in the 3-3.9% range. Investor wealth rose by Rs 1 lakh crore with over 1,600 stocks closing higher. Buying was so strong that all 13 sectorial indices closed with sharp gains.
A portion of today’s rally may be attributable on the hopes of surprise policy changes by the Reserve Bank of India in its first quarter monetary policy review tomorrow. Majority of experts do not expect change in policy rates and cash reserve ratio as inflation is still above the RBI’s comfort level of 7% but some experts feel that the RBI may cut repo rate by 25 basis points. Domestic investors were also encouraged by reports that the government has prepared contingency plans for 320 districts where monsoon rains have been poor amidst fears of a 20% shortfall in rains.
Global cues helped the sentiment through speculation that European Union policy makers will take action to ease the region’s debt crisis and revive its sluggish economy. Asian markets, barring China ended with gains between 0.48% and 1.61% on hopes of actions by European leaders to curb the region’s debt crisis. European stocks also traded higher as key indices from France, Germany and UK were quoting increases between the range of 0.4% to 0.76%.
In India, major Sensex gainers were SBI (4.63%), Tata Motors (4.16%), Tata Power (4.12%), ICICI Bank (3.89%), BHEL (3.82%), L&T (3.38%), GAIL India (3.31%), Sterlite Industries (3.27%) and NTPC (3.01%).
Infosys (2.82%), Tata Steel (2.73%), M&M (2.44%), Sun Pharma (2.31%), Jindal Steel (2.09%), Cipla (1.98%), Bajaj Auto (1.43%), ITC (1.38%) and RIL (1.23%) also notched up.
Among losers, ONGC shed 0.31%, followed by HUL and Wipro that closed marginally down from Friday’s levels.
Among sectorial indices, the BSE-Power jumped 3.58%, followed by the BSE-Realty (3.13%), the BSE-CG (3%), the BSE-Bankex (2.67%), the BSE-CD (2.53%), the BSE-Auto (2.26%), the BSE-Metal (2.09%) and the BSE-PSU (1.94%).
Total turnover dropped from Rs 1,748.49 crore to Rs 2,514.43 crore from last Friday.