The Hindu Business Line : Jubilant mood continues; benchmarks hit new highs

Pointers
Markets close at an all-time high.
IIP recorded an expansion at the fastest pace in 11 years in November.
Proposed SLR flexibility led to buying in bank stocks.

It was a jubilant day on Dalal Street as Sensex gained about 430 points to close at an all-time high. Nifty, too, reflected the positive trend, closing at a new high after a gain of about 2.8 per cent. The bulls continued to party for the second consecutive session, encouraged by positive cues from global markets and India's industrial production numbers, which rose 14.4 per cent over the corresponding period last year. Further, the cabinet's move to introduce Statutory Liquidity Ratio (SLR) flexibility led to buying in the banking space.

Among the BSE sectoral indices all, but the consumer durables index closed in the positive turf. However, the day's rally can be primarily attributed to the gains in large cap and bank stocks. The market breadth remained positive, with about three stocks advancing for every two declines.

Sector focus

Banking stocks gained on expectations that the RBI may cut the SLR to boost system liquidity. The Government, on Thursday had approved changes to the banking law, providing the RBI flexibility to change the SLR from the current level of 25 per cent.

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ICICI Bank led the gainers pack, with an appreciation of about 8.5 per cent. Federal Bank and Bank of India chipped in gains of over 7 per cent each. Other counters that registered gains in this space were Oriental Bank, HDFC Bank, State Bank of India and Punjab National Bank. UTI Bank clocked in gains of about 3.9 per cent after it reported a 40 per cent rise in Q3 net.

The large caps stocks advanced on the back of renewed buying interest and short covering in the derivative segment. Incidentally, the day saw all BSE-30 stocks close in the green.

The Government's decision to lift the ban on sugar exports led to a rally in the sugar stocks, which witnessed buying across board. Bajaj Hindustan, Balrampur Chini, Dhampur Sugars and Oudh Sugars were some of the stocks that notched up significant gains.

IT stocks, caught in the bull's grip, continued to appreciate on expectations of a robust quarter. HCL Technologies registered gains of about 4.25 per cent. Satyam Computer, TCS and Patni Computers gained over 3 per cent each. Infosys gained about 2 per cent. The stock has been raised to a `buy' from `neutral' rating by Bank of America.

Low crude price led to gains in the oil and gas stocks. Among stocks that gained were IOCL, BPCL, HPCL and Reliance.

The favourable crude price scenario seemed to have rubbed off positively on the airline stocks too. Deccan Aviation gained about 2.5 per cent. SpiceJet gained 4 per cent after its shareholders approved the sale of about $70 million (approximately Rs 315 crore) worth of stocks to investors, including Tata Group, Goldman Sachs Group and BNP Paribas.

Stock-specific action

JP Associates clocked in gains of 2.6 per cent after it posted an increase of 82 per cent in net profit for the quarter ended December in comparison to the same quarter last year.

Tech Mahindra gained 3.7 per cent on news that it has planned to set up a software development centre in Hyderabad.

Marico appreciated about 4.4 per cent after its board approved a 10:1 stock split.