Mumbai, Nov 3: The 30 scrip sensitive index of the Bombay Stock Exchange (BSE) rallied for the fourth straight session on Monday, Nov 3 by 549.62 points and ended in green at 10,337.68 on renewed buying support by local operators after the central bank cut its policy rate for the second time in a fortnight.
Similarly, the Nifty index of National Stock Exchange (NSE) also advanced by 158.25 to close firm at 3,043.85. A surprise rate cut in Cash Reserve Ratio (CRR) by the Reserve bank over the weekend, the stock market regulator's decision to increase tenure for lending and borrowing of stocks, and firm Asian stocks, boosted the domestic bourses on Monday, Nov 3. The BSE Sensex rallied led by gains in capital goods, banking, auto and realty stocks. The market also got support from the Prime Minister's assurance to business leaders that government will take measures to protect growth, a leading broker said.
Lower rates boosted stocks as they helped lift corporate bottomline by way of lower borrowing costs. The RBI last Saturday cut its main short-term lending rate for the second time in as many weeks to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.
The Securities&Exchange Board of India (SEBI)'s decision to extend the tenure for lending and borrowing of stocks is aimed at making the domestic stock lending and borrowing (SLB) mechanism more robust and increase liquidity in the secondary markets. Short selling refers to selling of shares one does not own and a SLB mechanism facilitates this activity.
European shares rose today, to track gains on the Wall Street and in Asia, as investors hoped recent worldwide steps to stem the financial crisis and likely rate cuts in Europe this week would calm market nerves. The key benchmark indices in France, UK and Germany were up by between 0.41 per cent to 1.21 cent. Asian stocks edged up for a fifth straight day today on hopes policy efforts so far to dampen the impact of the financial crisis would ultimately take hold, though data still painted an ugly picture of the global economy. Key benchmark indices in Hong Kong, Taiwan, Singapore and South Korea rose by between 1.44 per cent to 3.93 per cent, which helped boost the Indian bources, brokers pointed out.
The market rose amid intermittent bouts of profit taking after a recent steep surge. The Sensex jumped 585.11 points at the day's high of 10,373.17 in late trade. The Sensex rose 324.60 points at day's low of 10,112.66 in mid-afternoon trade. The Nifty recorded the day's high at to 3,062.05 and a low at 2885.40 points.
The BSE Mid-Cap index was up 3.77 pc at 3,325.85 and the BSE Small-Cap index was up 3.65 pc at 3,902.14. Both the indices underperformed the Sensex. The market breadth was strong. On BSE, 1,962 shares advanced as compared to 638 that declined. 52 shares remained unchanged. There was a drastic decline in the volumes today. Total trade turnover stood at Rs 47,883.52 crore. This includes Rs 10,098.19 crore from NSE Cash segment, Rs 34,113.94 crore from NSE F&O and the balance Rs 3,671.39 crore from BSE Cash segment.