(RTTNews) - The Indian market continued its surge on Wednesday, boosted by expectations of a market friendly budget after Prime Minister Manmohan Singh spoke about 8-9 percent growth and promised more spending on infrastructure and public services. Aggressive buying by foreign funds in recent sessions, the rise in the value of rupee for a second straight day and favorable Asian cues also helped improve sentiment.
After meeting chiefs of state-run banks, finance minister Pranab Mukherjee said on Wednesday that banks have agreed to explore the possibility of cutting interest rates further. The impact of stimulus steps might turn around the economy in the near-term and the government would provide a conducive atmosphere for growth by focusing on public spending, he said.
The benchmark for the Indian market, the BSE Sensex opened higher at 15,168 and surged to an almost 12-month high of 15,581 before paring some of its gains to finish at 15,467, up 340 points or 2.25% from its previous close. Likewise, the S&P CNX Nifty rose 104 points or 2.29% to 4,655. The broader market underperformed the large-caps, as profit taking continued in small-caps and mid-caps. Central banks around the world have created an enormous amount of liquidity in the system, which is finding its way into commodities and emerging markets like India, analysts said.
Sector-wise, while power, capital good, consumer durable and banking stocks led the gainers, public sector, IT and auto stocks showed modest gains and realty stocks ended in the red. The market breadth on the BSE was negative. Decliners outnumbered advancers by 1553 to 1218.
Tata Power(up 6.43%), Reliance Infrastructure(up 5.99%), HDFC Bank(up 5.56%), Ranbaxy Laboratories(up 5.44%), ACC(up 5.40%), Reliance Communication(up 5.30%), BHEL(up 4.62%), Larsen & Toubro(up 3.80%) and Mahindra & Mahindra(up 3.41%) were the top gainers.
On the other hand, Tata Motors fell 1.95%, DLF declined 1.71%, Sun Pharma moved down 0.83%, State Bank of India eased 0.37%, HDFC shed 0.23%, Jaiprakash Associates slipped 0.20% and TCS edged down 0.04%.
Banking stocks, with the exception of IDBI Bank, Canara Bank and SBI, closed higher after the finance minister mooted consolidation in the banking space to improve competitiveness of state-run banks.
Unitech edged up 0.28% after it launched its new initiative, branded Uni Homes, with apartment sizes starting at 660 sq. ft. Separately, reports suggest that the company has exited from New Kolkata International Development, a special purpose vehicle to develop large projects in West Bengal. Akruti City rose 2.52% and Indiabulls Real Estate gained 0.37%, but Sobha Developers and Orbit Corporation plunged 5% each, Anant Raj Industries slumped 4.06%, Parsvnath Developers tumbled 3.55% and Ansal Infrastructure fell 3.27%.
