Led by hectic buying in capital goods, banking and IT stocks, the benchmark stock indices surged on Friday. This followed significant improvement in HSBC Manufacturing Purchasing Managers’ Index (PMI) data, which hit a two-year high, and high expectations from the ongoing knowledge summit (Gyan Sangam) of public sector bank heads along with Reserve Bank of India Governor, Finance Minister and the Prime Minister in Pune.
As buying gained momentum, the BSE Sensex rose to intra-day high of 430 points before closing with a gain of 380 points or 1.38 per cent at 27888 points. Similarly, the NSE Nifty closed with a gain of 111.45 points at 8395.45, up 1.35 per cent.
Among the BSE sectoral indices, capital goods indices closed with a gain of 1.67 per cent, while the Bankex closed 1.66 per cent higher and IT index was up 1.20 per cent. HDFC, ICICI Bank and Axis Bank were among the top five Sensex gainers on Friday.
“The indices rose as the PMI data that grew 54.5 per cent in December was very encouraging. There was also news that foreign institutional investors have increased their allocation for India by 8 per cent. There was also some short covering. The Gyan Sangam also added to the buying momentum,” said Ambareesh Baliga, independent market analyst.
“The rise was largely attributed to buying in banking stocks. The Prime Minister’s participation at the Gyan Sangam and the expected consolidation in the public sector banking space has given rise to hopes of radical reforms. That is why people are buying,” said Deven Choksey, Managing Director and CEO, KR Choksey Share and Securities.
The Finance Ministry’s statement that fiscal position would improve during January-March 2015 quarter following possible pick up in tax revenue realization, receipts from spectrum auction and stake sale of PSUs also encouraged the benchmarks said Jayant Manglik, President-retail distribution, Religare Securities.
“The surge in PMI indicated that the industrial activity has picked up in December, also expectations of cooling inflation in December further made strong case for rate cut. The sentiment was also lifted by Gyan Sangam. Banking stocks delivered a stellar performance today,” said Kiran Kumar Kavikondala,Director and CEO, WealthRays Securities.
