The Hindu Business Line : After days of gloom, Diwali brings cheer to the markets

Mumbai, Oct. 28 Samvat 2065 (new year) brought some sparkle to Indian stocks. The one-hour Muhurat (auspicious) trading on Tuesday saw the BSE Sensex gain nearly 500 points, after five days of spine-chilling decline that axed 20 per cent off the index.

Unusually for this year, after the worst pre-Diwali session ever, the Sensex gained 5.86 per cent. It opened up by 448 points and did not flag for the rest of the session. The Nifty, too, closed up nearly 6.68 per cent.

Muhurat trading sessions over the last decade have left the indices near flat; the previous year had even seen it decline.

On Monday, the Sensex had dipped more than a thousand points intra-day before closing at 8,509.56. The NSE’s volatility index touched a high of 90.7 before closing at 67.5.

Tuesday saw the mood lift a bit. “It is considered an auspicious day to buy today and what with the market having fallen so much in the past one year, investors felt today was the right day to start,” said the head of research at a stock broking firm.

Though the volumes were thin, the domestic institutions were buying and there was just about no selling during the hour of trading, said market-men.

According to provisional data on the exchanges, FIIs remained net sellers to the tune of Rs 69.18 crore while domestic funds bought Rs 24.78 crore.

Global cues

“The market took its cues from the world markets. Globally the markets have rallied today,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets.

The Nikkei was up 6.41 per cent, the Kospi 5.57 per cent, the Hang Seng 14.47 per cent; the FTSE had opened positive.

Market-men said stocks rallied globally as investors expect the US Fed to cut interest rates at its meeting on Wednesday, which would boost investor confidence.

Realty, capital goods, power and metal indices gained the most. Mahindra & Mahindra, Jaiprakash Associates, Hindalco and Reliance Infrastructure were the best performing scrips amongst the 30 Sensex stocks, all of which closed in the green.

The market breadth was positive as 1,865 scrips advanced and only 433 declined. The mid-cap and small-cap indices, too, surged today.

The mid-cap index closed up 6.45 per cent and the small-cap index 6.69 per cent.