Robust gains in Reliance Ind and positive cues from Asia help sentiment
MUMBAI: The Bombay Stock Exchange sensitive index, Sensex, on Tuesday surged to its nearly two-month high with a 218-point rally helped by robust gains in heavyweight Reliance Industries and positive cues from Asia and Europe.
The BSE's 30-share index rose by 218.19 points, or 1.27 per cent, to 17383.18, the highest closing level since January 20. During the day, the index had risen 1.47 per cent to a high of 17416.55.
Experts attributed the rally to heavy buying by foreign investors, who have made a net inflow of over $2 billion so far this month.
They further said that emerging markets had become their top-focus area on expectations that the U.S. would continue with its low interest rate regime.
The U.S. central bank Federal Reserve's interest rate monitoring committee, Federal Open Market Committee (FOMC), is scheduled to meet on Tuesday to consider its next course of action.
On the domestic front, a good set of advance tax numbers also helped improve buying sentiment in the market.
“The markets rallied on the back of good advance tax numbers and U.S. Fed meet. It is expected that there will not be a sharp rise in the interest rates for the short-term,” Angel Broking Vice-President (Research) Sarabjit Kour Nangra said.
The U.S. Federal Open Market Committee meeting on Tuesday will discuss the monetary policy strategy and to give a description of the economy is also keenly awaited.
Reliance Industries, which has the maximum weight in the Sensex, gained 3.80 per cent to Rs. 1,066.80, helping the market post smart gains. “RIL, which was underperforming the market, has started to outperform. As the amount of March quarter advance tax paid by RIL doubled, investors were upbeat on an imminent increase in profit,” SMC Global Vice-President Rajesh Jain said.
Advance tax collections from top corporate houses of Mumbai region grew over 3 per cent to more than Rs. 11,000 crore during January-March 2010 as compared to the corresponding period in the previous year.
RIL has paid Rs. 770 crore as advance tax in the latest quarter, higher from Rs. 365 crore in the year-ago period.
Other major gainers were Tata Steel (2.82 per cent at Rs. 627.15), L&T (2.80 per cent at Rs. 1,597.80), M&M (2.66 per cent at Rs. 1,134.70) and Sun Pharma (2.54 per cent at Rs. 1,667.60).
Among the Sensex stocks, there were 25 advances against 5 declines. Bharti Airtel was the biggest index-wise loser (1.60 per cent at Rs. 294.75), followed by ACC (1.26 per cent at Rs. 969.60).
“The FOMC meet will give an idea as to where the interest rate is heading in the U.S. This will act as a big trigger for the U.S. market, which has been range-bound for quite sometime, and in turn will impact Indian stocks,” Mr. Jain said.
Meanwhile, global markets were holding steady with China's Shanghai index locking 0.53 per cent gain and Europe's FTSE rising 0.65 per cent in early trade. — PTI