The Indian markets rallied on Friday, mirroring strong global cues as easing concerns over Europe’s debt crisis along with data released overnight showing the world’s largest economy
The Indian markets rallied on Friday, mirroring strong global cues as easing concerns over Europe’s debt crisis along with data released overnight showing the world’s largest economy grew at its fastest in a year in the third quarter boosted investor confidence over global growth outlook.
Rate hike concerns also abated to some extent after the Reserve Bank of India on Tuesday indicated that further rate hikes may not be there if inflation moderates.
The benchmark 30-share Sensex and the broader Nifty index on the NSE climbed around 3 percent each, with metal, realty, banking, capital goods and auto stocks pacing gains. Second-line stocks posted relatively modest gains, with the BSE mid-cap and small-cap indexes rising 1.5 percent and 0.9 percent, respectively.
The market breadth on the BSE remained fairly positive, with gainers outpacing decliners by 1726 to 1141 shares, while 92 others closed unchanged.
Hindalco led the gainers in the metal sector, climbing nearly 11 percent, while JSW Steel soared 10 percent, Sterlite Industries jumped around 9 percent, Jindal Steel gained 7.5 percent and Tata Steel added 6.5 percent, as base metals rallied on Thursday, buoyed by Europe’s plan to contain its debt crisis.
SBI rose 2.2 percent amid reports of capital infusion in public sector banks, while private sector rival ICICI Bank soared 7 percent and HDFC Bank advanced 2.3 percent. Mortgage lender HDFC closed up 3 percent.
Yes Bank closed 2.4 percent higher after the new generation bank hiked its savings bank rate by two percent to six percent pursuant to an announcement by the RBI on Tuesday to deregulate savings deposit interest rate.
Market heavyweight Reliance Industries rallied 2.8 percent, Tata Motors, India’s largest automaker, climbed 7.3 percent, property developer DLF and diversified infrastructural industrial conglomerate Jaiprakash Associates rallied around 8 percent each, engineering & construction giant Larsen & Toubro rose 4.6 percent and state-run oil explorer ONGC ended up 3 percent.
Suzlon Energy rallied 4.8 percent after the wind turbine maker said it achieved full control of its German subsidiary by acquiring all of its shares. Gokaldas Exports jumped 14.8 percent on the buzz it may win new business contracts from Wal-Mart and niche European fashion houses who are moving some part of their sourcing from China to other Asian markets.
Heritage Foods soared 8.5 percent on posting strong Q2 earnings. Wheels India hit the 20 percent circuit limit after its second-quarter profit more than doubled to Rs.11 crore.
Jindal Poly Films surged up 8 percent after its board approved a share buyback. Indian Hotels rose 0.7 percent and NHPC gained 4.6 percent after announcing their Q2 results.
Among those that fell, car maker Maruti Suzuki fell 2 percent ahead of its quarterly results tomorrow, while Bharti Airtel and Bajaj Auto closed little changed with a negative bias.
Shares of state-run oil retailers such as IOC, HPCL and BPCL lost between half a percent and 3 percent after crude prices climbed more than 4 percent in New York trading overnight, primed by the EU deal on Greek public debt.
On the global front, other Asian markets extended the previous session’s rally on Friday, as strong U.S. GDP data and a new debt relief and bailout deal hammered out by European leaders eased fears that the global economy would fall into a second recession.
However, European stocks erased early gains, the Dow futures retreated and commodities such as crude and copper slipped after a sharp rise in the previous session, as investors tempered their enthusiasm toward the euro-zone debt rescue plan and awaited more details.
Meanwhile, data released today showed that Japan’s industrial production contracted for the first time in six months, continuing to reflect the results of the devastating earthquake and tsunami on March 11. Industrial production was down a seasonally adjusted 4.0 percent on month in September, well shy of forecasts for a decline of 2.1 percent following the 0.8 percent gain in August.