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BW Businessworld

Markets Rally To 4-Month High

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The Sensex soared 226 points on 10 July riding on the surge in capital goods, FMCG, auto and banking shares to close at fourth-month high of 17,618.35 amid strong global cues after Eurozone finance ministers agreed on a deal to nurse the ailing Spanish banks back to health.

The BSE benchmark index, which had lost 129 points on 9 July, was under some pressure in early trade after Asian markets slumped on disappointing Chinese imports data.

However, sentiments quickly changed after reports of EU leader ratifying the Spanish deal started trickling in.

Leaders in Brussels announced steps, including an extra year until 2014 for Spain to achieve its deficit reduction targets, which drove stocks in the UK, France and Germany higher.

With 28 scrips of the 30-share index ending higher, the index closed with a gain of 226.37 points. This level is highest for Sensex after it closed at 17,675.85 on March 15.

Similarly, the 50-share NSE Nifty shot up by 70.20 points, or 1.33 per cent to 5,345.35.

"The news from Euro-zone was positive for equities. Bank clearly led the rise. Rupee also recovered sharply" said Milan Bavishi, Head Research, Inventure Growth and Securities.

Snapping a four-day losing string, the rupee was last trading at 55.50 against dollar compared to 9 July's close of 55.92.

Brokers said auto stocks, including Maruti and Tata Motors, jumped after data showed car sales data in the country grew 8.28 per in June amid tough market conditions.

Expectations of good results from banks and financial sector also improved the market mood with HDFC Bank, ICICI bank and HDFC gaining in the 1-2 per cent range, traders said.

A subdued trend in crude oil, which fell below USD 99 a barrel, aided sentiments, experts said.

Besides the Spanish deal development, better-than- expected UK manufacturing data supported gains in European stocks with key benchmark indices in France, Germany and UK trading higher in the 0.72-1.22 per cent range.

However, Asian stocks closed lower after macroeconomic data from China deepened fears of a global slowdown. Key benchmark indices in China, Hong Kong, Japan, South Korea, and Taiwan fell between 0.16 per cent to 0.80 per cent while Singapore's Strait Times shot up by 1.21 per cent.

Trading in US index futures indicated that the Dow Jones Industrial Average could gain 39 points on opening on 10 July.

Back home, major gainers from the Sensex pack were Hindalco (2.74 per cent), Maruti Suzuki (2.72 per cent), ITC (2.71 per cent), Tata Motors (2.58 per cent), Sterlite Industries (2.46 per cent), Jindal Steel (2.41 per cent), L&T (2.08 per cent), HDFC Bank (1.86 per cent), Hero MotoCorp (1.72 per cent) and Gail India (1.52 per cent).

Bharti Airtel (1.50 per cent), Cipla (1.46 per cent), ICICI Bank (1.37 per cent) and Reliance Industries (1.02 per cent) also clocked gains.

However, Wipro that lost 0.36 per cent and NTPC that was marginally down were the only losers in the 30-share index.

Among the BSE sectoral indices, the BSE-Capital Goods rose by 1.75 per cent, followed by the BSE-FMCG (1.75 per cent), the BSE-Auto (1.62 per cent), the BSE-Bankex (1.54 per cent), the BSE-Metal (1.48 per cent), the BSE-Realty (1.46 per cent). The BSE-Power and the BSE-Consumer Durables also rose over one per cent each.

The total turnover firmed up to Rs 2,004.12 crore from Rs 1,818.07 crore on 9 July.


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