MUMBAI: Indian equity market kicked off 2009 on a positive note on across-the-board buying by retail investors. Heavy buying was seen in realty, metals and capital goods as traders expected interest rate cut and another stimulus package from the government.
Fall in WPI inflation rate to a nine-month low also increased scope for interest rate cuts. India’s annual rate of inflation fell from 6.61 per cent to 6.38 per cent for the week ended Dec 20.
Bombay Stock Exchange’s Sensex closed at 9,903.46, up 256.15 points or 2.66 per cent from Wednesday. It soared to a high of 9,921.70 from a low of 9,711.64 during the day.
National Stock Exchange’s Nifty ended at 3,033.45, up 74.3 points or 2.51 per cent. The broader index touched an intra-day high of 3,039.25 and low of 2,963.30.
“Today’s trade was dominated by domestic institutions and mutual funds as FII desks were non-functional due to New Year holiday. In the short term, market would face resistance at 3120/10200 (Nifty/Sensex) and if corporate results are better than expected we may also see 3400/11000,” said Ram Chandran Iyer, Head Institutional Sales, Fortune Equity Brokers.
“Market is gearing for Q3 results which are seen to be terrible than the last quarter. But the market has already factored this…unless the results are worse. The good news is that FIIs have stopped selling and it may provide some support,” he added.
Traders also took long positions in beaten down midcap and smallcap stocks. The BSE Midcap Index closed 2.6 per cent and BSE Smallcap Index ended 3.46 per cent.
Significant gains in Reliance Communications (7.99%), Tata Motors (7.48%), Satyam Computer (7.17%), Wipro (6.17%) and Larsen & Toubro (6.11%) drove the key indices sharply higher.
Stocks from defensive sectors such as pharmaceuticals and FMCG ended with losses. Ranbaxy Laboratories ended down 0.97 per cent and ITC slipped 0.03 per cent.
Market breadth on BSE was extremely positive with 2,001 advances against 493 declines.
However, the slowdown in US and other global economies has started impacting India. The country’s exports fell by 9.9 per cent in November to $11.5 billion from $12.7 billion a year ago, while imports grew by 6.1 per cent to $ 21.5 billion.