MC: RBIs rate cut boosts mkts; bank, realty, CG, oil stks lead
The Reserve Bank of India's move to rates cut to increase liquidity, and positive global cues helped the markets to remain on upsurge on the first day of the week as well. The Nifty ended above the 3,000 mark while the Sensex closed above the 10,300 level. Huge buying was seen in capital goods, realty, banking, oil and metal stocks. Midcap and small cap stocks followed the same trend.
Reliance Industries, L&T, SBI, ICICI Bank, HDFC, Bharti Airtel, ONGC and NTPC were biggest contributors in today's rally.
The Sensex hit an intraday high of 10,373.17, before closing the session at 10,337.68, with a gain of 549.62 points or 5.62% over the previous close. The Nifty jumped 5.48% or 158.25 points, to settle at 3043.85, after touching a high of 3062.05. Sensex and Nifty surged 35% from recent lows in five trading sessions.
The RBI cut the repo rate by 50 basis points to 7.5% on Saturday, which got effective from today. It had also cut CRR, or cash reserve ratio, by 100 bps in two stages to 5.5%. The 100-bps CRR cut will infuse Rs 40,000 crore into the system, the RBI said.
The central bank also cut SLR to 24% by 100 bps from November 8 onwards. It has allowed refinance to banks up to 1% of NDTL, or net demand and time liabilities, for 90 days.
Rajeev Malik of Macquarie Capital Services feels the RBI action should have come in along with the credit policy. He believes the measures by the RBI should have been pre-emptive and said the central bank needs to ease rates far more aggressively. He expects the RBI to cut repo by another 100 bps over the next six months and to start moving repo, reverse repo in tandem next year.
Hemant Mishra of Standard Chartered Bank expects more cash reserve ratio cuts. "Our view is by end of Q1 next year, the CRR could well be at 4%."
Prime Minister Dr Manmohan Singh feels that the current financial crisis may be more severe and prolonged. The crisis is bound to hit the Indian economy, he said, adding that the government will take all the necessary fiscal and monetary steps to protect growth. He is confident that the Indian financial system will be stable and will function well.
There was a drastic decline in the volumes on Monday. Total trade turnover stood at Rs 47,883.52 crore. This includes Rs 10,098.19 crore from NSE Cash segment, Rs 34,113.94 crore from NSE F&O and the balance Rs 3,671.39 crore from BSE Cash segment.
Among the frontliners, Reliance Infrastructure, DLF, Jaiprakash Associates, Ranbaxy Labs, SBI, Tata Motors, L&T, Idea Cellular and Tata Communication were up 11-17%. However,
The BSE Realty index jumped 164.04 points or 8.29% to 2,142.28. Peninsula Land, DLF and Parsvnath rose 11-15%. Unitech was up 2%.
Capital Goods stocks like Punj Lloyd, L&T and Crompton Greaves surged over 10%. Siemens, ABB and BHEL gained 4.6-9.3%. Capital Goods Index rose 574.61 points or 8.19% to 7,592.22.
Bankex closed with a gain of 376.15 points or 7.51% at 5,387.39. SBI jumped 11.8% and Kotak Mahindra Bank gained 9.77%. ICICI Bank and HDFC Bank rose 7.915 and 4.6%, respectively.
Power stocks charged up in today's trade. Reliance Infrastructure and Torrent Power surged 12-17%. NTPC and Reliance Power were up by 6.7-7.6%. Index was up by 102.62 points or 6.48% at 1,685.99.
The BSE Oil & Gas Index surged 351.50 points or 5.67%, to settle at 6,547.12. Cairn India, ONGC and Reliance Industries were up 4.8-7.4%.
Metal stocks like Jindal Saw, Tata Steel, SAIL, Hindalco and Sterlite Inds were up 4.5-8%. Index shot up 254.77 points or 4.75% to 5,622.37.
FMCG Index gained 72.07 points or 4% at 1,871.90. HUL, United Breweries, United Spirits, Tata Tea, Dabur India and ITC were up 3-7%.
The BSE Healthcare Index jumped 79.40 points or 2.86% to 2,858.04. Matrix Lab, Ranbaxy Labs, Divis Labs, Fortis Health and Glenmark were up 9.5-13.4%.
Telecom stocks like Idea Cellular jumped 15.20%. Tata Communication was up 11.4%. Bharti Airtel and Reliance Communication gained 5.4-6%. MTNL rose nearly 4.9%.
Auto stocks like Ashok Leyland and Tata Motors jumped over 11%. Maruti Suzuki and M&M rose 6.6% and 3%, respectively. Auto Index was up by 60.20 points or 2.24%, to end at 2,745.82.
IT index rose 12.42 points or 0.43% to 2,874.36. Tech Mahindra, TCS, Wipro and HCL Tech rose 1-2.7%.
Midcap and small cap stocks witnessed huge buying interest. BSE Midcap jumped 155.52 points or 4.86% to 3,355.54 and Small Cap Index shot up 161.99 points or 4.3% to 3,927.10.
Among the midcap stocks, Orbit Corporation, MIC Electronics, Brigade Enterprises, Reliance Industries Infra, IVRCL Infra and Jet Airways surged 22-33%.
In the small cap space, Everonn Systems, Khaitan Electrical, Tube Investment, INEOS ABS and Heritage Foods were up 20-21.5%.
Market breadth was extremely positive; about 2135 shares have advanced while 855 shares have declined. Nearly 201 shares remained unchanged.
On the global front, Asian markets ended strong barring Shanghai. Straits Times rose 4.99%. Hang Seng and Taiwan jumped 2.69% and 2.55%, respectively. Kospi was up 1.44% and Jakarta gained 7.64%. However, Shanghai fell 0.52%. Nikkei was shut today.
European markets were trading higher. FTSE was up 34.66 points and DAX up 30.56 points. However, CAC was down by 1 point.
The Dow Jones Futures was up 18 points to 9,316 and the Nasdaq Futures rose just 1.5 points to 1,338.50.
Markets Snapshot
Pull Back from Recent Low:
Nifty & Sensex 35%
Unitech 81%
Sterlite Ind 72%
Zee Ent 65%
Hindalco 58%
JP Associates 53%
Market gains for 3rd consecutive day led by banking stocks
Sensex closes up 549 points to close at 10337; Nifty closes up 158 points to close at 3043
CNX mid cap up 4.5%, Bse Small Cap up 4.3%
Bse Realty up 8.2%, DLF up 15.1%, Orbit up 32.5%, Brigade Ent up 25.3%, IVR Prime up 22%,
Bse Cap Goods up 8.1%, Punj Lloyd up 11.2%, L&T up 11.2%, Siemens up 7.8%
Bse Bankex up 7.5%, Sbi up 11.7%, Union Bank up 8.6%, Icici Bank up 8%, PNB up 7.5%
Bse Oil & Gas up 5.6%, RNRL up 23%, Cairn up 7%, ONGC up 6.2%
Index Gainers: Rel Infra up 16.8%, Idea up 15.6%, Ranbaxy up 12.4%, Tata Comm up 12.35
Mid Cap Gainers: Mic Elec up 26%, Edel Cap up 24.3%, Jet airways up 23.7%, Ivrcl Up 22%
Mid Cap Gainers: HCC up 20.4%, Lanco infra up 20%, Educomp up 15.2%, JP associate up 13.4%, IDFC up 12.6%, Chambal Fert up 13.1%, Aban up 10.8%, Adlabs up 13%
NSE Adv: Decline at 5:1
Total market turnover at Rs 47883.52 crore versus Rs 52895.42 crore
NSE F&O Turnover at Rs 34113.94 crore versus Rs 36959.23 crore
F&O Snapshot:
Nifty futures sees long build up, adds 26 lakh shares in OI
Nifty Futures ends at a premium of 20 points
Fresh Long build up gains momentum in banking stocks
Fresh Long build up in Telecom Stocks
Good build up seen in Momemtum stocks like RNRL, Chambal Fert, Suzlon Energy
Options Activity :
Nifty 3200 call adds 7.9 lakh shares
Nifty 3400 call adds 7.5 lakh shares
Nifty 3300 call adds 6.9 lakh shares
Nifty 2800 put adds 6.1 lakh shares
Fresh Long:
Heavy weight: Reliance Ind, SBI, Reliance Comm, Bharti, ICICI Bank, Tata Steel
