Prospects of rate cut in US stocks cheer market

Mumbai, Mar 22: The Sensex today soared by a whopping 362.15 points on the Bombay Stock Exchange to cross the psychological mark of 13,000 and close at 13,308.03 as investors were enthused by prospects of rate cuts in the US and Asian stocks rallying to a three-week high.

Among the broader markets, the Nifty Index also surged by 111.35 points on the National Stock Exchange (NSE) to end in the green at 3875.90 from its previous close of 3764.55 points.

''The Sensex has surged for the fourth consecutive day to cross the psychological mark of 13,000. The Wall Street had closed with impressive gains yesterday after the Federal Reserve left bank rates unchanged. It had also stated that inflation was not overwhelming.

The Asian bourses displayed strength as well. The bulls back home had nothing going against them, and with the bears lining up to cover their short positions in the derivatives segment, there was only one way the market could move today, and that is up north,'' market analysts observed.

The US Federal Reserve policy-setting meeting yesterday dropped an explicit reference to the possibility of taking rates higher in its statement, sparking talk that the next move could be a cut. The Fed left interest rates unchanged at 5.25 per cent. US interest-rate futures indicated a 48 per cent chance of a rate-cut by end of June this year, compared to 24 per cent before the Fed's announcement, experts noted.

Key benchmark indices in Asia were up by between 0.39 per cent to 2 per cent today. The Dow Jones industrial average shot up 159.42 points, or 1.30 per cent, to 12,447.52 yesterday. The Standard&Poor's 500 Index jumped 24.1 points, or 1.71 per cent, to 1,435.04, while the Nasdaq Composite Index surged 47.71 points, or 1.98 per cent, to 2,455.92.

The market-breadth on BSE was strong. Against 1,644 shares rising, 973 declined while 75 did not change. Gainers had outpaced losers by a ratio of 1.68:1.

Turnover on BSE improved from yesterday's Rs 2730 crore to Rs 3555 crore today.

HDFC Bank gained 5.8 per cent to Rs 1022 and ICICI Bank rose by 3 per cent to Rs 987. State Bank of India rose 4 per cent to Rs 1024, Bank of India gained 11 per cent to Rs 174, Canara Bank surged 7.5 per cent to Rs 207 and Punjab National Bank added 7 per cent, to Rs 485.

Oil exploration major ONGC surged nearly 5 per cent to Rs 853.

As many as 4.6 lakh shares changed hands in the counter on BSE.

Car major Maruti Udyog (MUL) gained 4.8 per cent to Rs 830.50, Hero Honda advanced 4.9 per cent to Rs 683, Tata Motors gained 3 per cent to Rs 801, and Bajaj Auto rose 3 per cent to Rs 2576.

Mahindra&Mahindra rose 3.4 per cent to Rs 781, after the company yesterday set a liberal interim dividend of Rs 7.50 per share for this finanacial year.

Bhel (up 6 per cent to Rs 2231) was the top-gainer among Sensex constituents.

Engineering&construction major L&T surged 5 per cent to Rs 1579.

Reliance Industries (RIL) gained nearly 3 per cent to Rs 1378.

However, caution prevailed in cement shares. Grasim lost 1.2 per cent to Rs 2080 and ACC shed 0.07 per cent to Rs 752. Cement makers have reportedly turned down a request by the government to cut prices. A meeting was held today between the Finance Minister and cement makers, as the government wants cement makers to moderate prices in its efforts to combat inflation.

UNI