The Sensex surged 2% at close on Thursday. It saw some profit taking in the second half of trade. Central banks' move to reduce the cost of dollar pushed all the global markets higher, by 2-6%.Sharp appreciation in the rupee too helped our markets coupled with short covering. The Sensex, which shot up nearly 600 points in intraday trade, ended up 359.99 points at 16,483.45. The Niftyrose 104.80 points, to close at 4,936.85, after hitting a high of 5,010 during the day.
Gerard Lyons, the global head of strategy and economics at Standard Chartered says the move by central banks last night and the cut in reserve ratio by China really helped make the dollar easier to access and increase dollar liquidity in the system.
The central banks of Canada, Japan and Switzerland along with the ECB, US Federal Reserve and Bank of England reduced the cost of dollar temporarily by 50 basis points. China cut reserve requirement ratio for banks by 50 bps - first time in nearly three years on Wednesday.
However, Peter Hooper, managing director and chief economist at Deutsche Bank says, he doesn’t think this move itself is going to be a game changer for the eurozone crisis. “I think the actions by the central banks help to reduce the stress near-term, but by themselves they are not going to change the game,” he said.
However, Peter Hooper, managing director and chief economist at Deutsche Bank says, he doesn’t think this move itself is going to be a game changer for the eurozone crisis. “I think the actions by the central banks help to reduce the stress near-term, but by themselves they are not going to change the game,” he said.
European Central Bank's chief also warned that downside risks to economy outlook have increased.
European markets were mixed, at the time of closing of Indian equities.
Back home, Vikas Khemani, executive vice president & head - institutional equities of Edelweiss Securities says, the rally may not sustain. “I think markets are going to see a big reversal from hereon. For India, the problem is a lot more domestic than only global.” According to him, fundamental problems still need to be addressed.
Appreciation in the rupee was quite sharp. It gained 74 paise at 51.45 to the dollar. SEBI's debt auction on Wednesday received good response from foreign investors, which raised hopes of dollar inflow.
Meanwhile, inflation has started declining. Primary articles inflation for the week ended on November 19 dropped to 7.74% versus 9.08% in previous week. During the same period, food articles inflation fell to 8% versus 9.01%. Finance Minister Pranab Mukherjee feels March inflation could be 6-7%, if current decline continues.
All the sectoral indices closed in a positive terrain barring pharma. The BSE Metal, Bank and Realty indices jumped 3.5-4%.
Shares of ICICI Bank, Tata Motors, Hindalco, Sterlite and SAIL topped the buying list throughout the session, shot up 6-7%.
Among the auto stocks, after their sales numbers for November, M&M was up 0.8% while Maruti lost 0.7%. Hero Motocorp gained 4.3% and Bajaj Auto rose 1.8% ahead of numbers.
Index heavyweights Reliance Industries, Infosys, HDFC, SBI, L&T and TCS moved up 2-3%.
However, major largecaps like Bharti Airtel and BHEL lost 2% on profit booking. Dr Reddy's Labs fell 2% after CBI issued notice to company's MD, pertaining to Chandrababu Naidu assets case.
BPCL dropped 2% after oil marketing companies cut petrol rates by Rs 0.78/litre. Sun Pharma and HUL too were under pressure.
Advancing outnumbered declining ones by 1725 to 1118 on BSE.
No comments:
Post a Comment