Equities began the week gap-up, catching up with gains in other markets, after a long weekend. But the upmove was shortlived as investors booked gains. Later, traders got some respite with the positive opening of European markets and began consolidating.
“We are getting support from some long-only FIIs who have re-entered markets after over a year. Global market scenario looks good and money is coming back to emerging markets. We will see some short term rally up to 11,000 (on Sensex) where some profit booking would emerge. It looks like our market has bottomed out and by September things will pick up,” Hitendra Nayee, institutional head of dealing, India Capital Markets.
Bombay Stock Exchange’s Sensex closed decisively above the 10,500 mark. The 30-share index settled at 10,534.87, advancing 186.04 points or 1.80 per cent from Thursday’s close. The Sensex touched an intra-day high of 10654.89 and low of 10410.44 intraday.
National Stock Exchange’s Nifty ended at 3256.60, up 1.42 per cent or 45.55 points. In the first few minutes of trade, the 30-index hit the 3300 mark but eased quickly. The broader 50-share index touched a high of 3303.90 and low of 3211.35 during the day.
Secondline stocks outperformed frontline counters. The BSE Midcap Index was up 2.48 per cent and BSE Smallcap Index gained 3.21 per cent.
Amongst the sectoral indices, BSE Consumer Durables, up 5.84 per cent, was the biggest gainer, followed by BSE Capital Goods Index which gained 3.75 per cent. BSE Metal Index advanced 3.65 per cent and BSE Auto moved up 3.59 per cent. However, BSE FMCG Index ended 1.82 per cent lower.
Mahindra & Mahindra (14.26%), Reliance Communications (11.19%), Larsen & Toubro (7.4%), HDFC (7.37%) and Reliance Infrastructure (6.47%) were the biggest gainers in the 30-share index.
ACC (-3.14%), ITC (-2.49%), Ranbaxy Laboratories (-2.3%), Grasim Industries (-2.13%) and Hindustan Unilever (-1.67%) were the losers.
“Companies belonging to ADAG group, Suzlon, DLF, Tata Steel and others were reacting to AS11 suspension. Traders who have gone long were seen covering shorts as well. This spike in largecaps also provided the much needed support,” India Capital’s Nayee said.
The government on Thursday suspended a key accounting norm on foreign exchange losses for the period starting December 7, 2006, to March 31, 2011, allowing companies to protect their profits from a sudden increase in their foreign loan liability on account of adverse currency movements. This marks a rare occasion where companies are being allowed to restate their past accounts.
Tata Steel closed up 4.89 per cent, Suzlon Energy surged 10.64 per cent, DLF gained 3.07 per cent, Reliance Communications rallied 11.19 per cent and Reliance Capital moved up 4.28 per cent.
HCL Technologies announced a six-year, $100-million deal with Xerox. In addition, the company won a five-year IT services contract worth close to $170 million from software giant Microsoft Corporation. The scrip closed up 5.01 per cent.
The Wadia group is buying out 60.86 lakh shares of Britannia via Leila Lands, a subsidiary of Bombay Burmah based in Mauritius, from Danone. This saw the scrip close 3.62 per cent higher.
India’s equity markets will be shut Tuesday on account of festival Mahavir Jayanti.