Index heavyweight Reliance Industries led the rally on the bourses today while Improved Index of Industrial Production (IIP) data aided the surge. Firm Asian and European markets also boosted the sentiment. However, Infosys slipped ahead its Q4 March 2008 results due on April 15. The select stocks, particularly midcap and small cap, and power indices closed in the green showing resilience to the bad news of inflation. Inflation numbers came in higher than estimates at 7.4 per cent.
Analysts were expecting inflation at 7 per cent to 7.2 per cent but it came in as a negative surprise at 7.41 per cent.
Analysts expect some liquidity measures like CRR hike to curb inflation.
Power and capital goods stocks rose. IT stocks were mixed.
Banking stocks rose.
Bharat Heavy Electricals and Larsen&Toubro were major gainers from the Sensex pack, while Ambuja Cements and Infosys were the major losers. The market breadth was strong.
Asian stocks rose today, after Bank of America Securities upgraded the US semiconductor sector and Wal-Mart Stores Inc, the world's largest retailer, raised its profit forecast. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore, and Taiwan were up between 0.61 per cent to 2.92 per cent. European markets which opened after Indian markets, were firm. France's CAC 40, Germany's DAX and UK's FTSE 100 rose between 0.69 per cent to 1.15 per cent.
The markets witnessed choppy trades and moved upwards further.
Midcaps have also bounced back and both the midcap and smallcap indices were up 1 per cent. Banking space traded weak and FMCG index also traded flat.
India's industrial output rose 8.6 per cent in February 2008, rising from the previous month's upwardly revised 5.8 per cent growth, data showed today.
The 30-share BSE Sensex ended up by 112.54 points or 0.72 per cent at 15807.64 points. The Sensex gained 262.14 points at the day's high of 15957.24 in early afternoon trade. It touched the day's low of 15673.67 in mid-morning trade.
The BSE clocked a turnover of Rs 5,556 crore today as compared to yesterday's turnover of Rs 5519.49 crore.
The S&P CNX Nifty index of National Stock Exchange (NSE) was up 44.80 points or 0.95 per cent at 4777.80 at the end of the session as against 4733 points on last day's trade. It recorded the day's high at 4871.40 and the day's low at 4727.25 points.
The BSE select indices were again in the limelight as CD index rose 368.38 points and ended firm at 13267.51 points, followed by Oils and gas index which rose 302.01 points at 11028.75. PSU index rose 117.74 points at 7444.41, metal index rose 111.43 points at 13966.38, power surged 64.36 points at 3164.39, smallcap index was up 50.37 points at 8081.43, and midcap index was up 44.26 points at 6523.22.
On the BSE, 1634 stocks gained, 1055 stocks declined while 59 stocks were unchanged.
India's largest private sector firm by market capitalization and oil refiner Reliance Industries rose 3.34 per cent to Rs 2550.05.
Reportedly, Reliance is in talks with several oil majors to sell up to 10 per cent in its deep-water D6 block off India's east coast.
IT stocks were mixed. Infosys, India's second largest IT exporter by sales, declined 1.96 per cent to Rs 1424.95. Tata Consultancy Services was up 0.69 per cent to Rs 907 and Satyam Computer Services moved up 2.96 per cent to Rs 436.
Banking stocks were mixed after higher inflation data. India's largest private sector bank by operating income, ICICI Bank declined by 1.71 per cent to Rs 787.25. It came off from its high of Rs 822.
However, State Bank of India gained 0.2 per cent to Rs 1665.10 and HDFC Bank rose 0.34 per cent to Rs 1330.
Larsen&Toubro hiked by 3.65 per cent to Rs 2,776, Bharat Heavy Electricals was up 3.67 per cent to Rs 1,830 and Suzlon Energy rose 0.22 per cent to Rs 290.35.
In the power stocks segment, Tata Power Company increased by 3.95 per cent to Rs 1247.05 and Reliance Power was up 0.82 per cent to Rs 361.35. NTPC moved up 0.27 per cent to Rs 186.50.
India's second largest power utility by revenue Reliance Energy rose 2.22 per cent to Rs 1281.15 after the company said yesterday that it has spent about a third of the Rs 800 crore allocated for buying back shares from the stock market.
In the oil and gas stocks group, Cairn India gained 4.38 per cent to Rs 252.75, followed by Gail India which rose 4.24 per cent to Rs 445, and Reliance Petroleum which gained 3.68 per cent to Rs 181.95.
Hindalco Industries was up 1.67 per cent to Rs 176.35, followed by Reliance Communications up 1.83 per cent to Rs 493.25, Bharti Airtel up 0.69 per cent to Rs 804.20, Mahindra&Mahindra up 1.31 per cent to Rs 620.25 and Tata Steel up 0.92 per cent to Rs 692.20.
Ranbaxy Laboratories was down 1.58 per cent to Rs 443.55, followed by Grasim Industries which fell 0.78 per cent to Rs 2,550, Hindustan Unilever down 2.02 per cent to Rs 235.15, ITC down 1.83 per cent to Rs 204.15, Ambuja Cement down 3.61 per cent to Rs 117.60, and ACC down 0.05 per cent to Rs 813.20.
Recent government action to rein in inflation has also added to uncertainty about outlook on corporate profits. The government has scrapped import duty on crude edible oil and banned the export of rice and pulses.
Prospects of further outflow by foreign funds to offset losses incurred by them in the US sub-prime mortgage market continued to weigh on the market sentiment. In the calendar year so far, FIIs sold shares worth a net Rs 11455.60 crore till April 9, to offset their huge losses in the US sub-prime mortgage market.
As far as domestic liquidity is concerned, inflows to equity mutual funds and unit linked insurance plans (with high weightage for equity) have slowed after the sharp setback on the bourses in the past two months. As per provisional data, domestic funds bought shares worth a net Rs 594.48 crore yesterday.