The Hindu Business Line : Sensex gains 200 points on stimulus package hopes

Mumbai, Dec. 29 Expectations of another stimulus package — including a rate cut by the Reserve Bank of India – and positive cues from overseas market boosted sentiment in the equity market on Monday.

Sensex and Nifty gained over two per cent on the back of fresh buying support in the afternoon session.

Rise in crude oil prices following the tension in West Asia supported shares of oil producing companies such as Reliance Industries, Reliance Petroleum, Cairn India and ONGC.

A turnaround in the Asian market after a negative opening as well as a firm opening of the European markets also fuelled positive sentiments.

The benchmark indices reversed the negative trend in the past four trading sessions. Sensex gained 204 points to close at 9533 and Nifty closed with a gain of 65 points at 2922.

In the morning session there was no positive factor to support the market but by the afternoon the possibility of a RBI rate cut and a fiscal package has changed the sentiment, said Mr Vishwas Agarwal, an independent analyst.

There were reports that the RBI Governor had a meeting with the Prime Minister, Dr Manmohan Singh, who is also the Finance Minister, possibly discussing the stimulus package.

The domestic institutional investors were net buyers of equities worth Rs 243 crore, proprietary traders (brokers) too bought equities worth Rs 44 crore, the provisional data indicated.

The FIIs were also net buyers of equities, though for a meagre amount of Rs 4.42 crore. However, their participation in the cash market improved compared to last week. FIIs bought shares worth Rs 819 crore and sold Rs 815 crore on Monday.

Among the sectoral indices, the major gainers were BSE Bankex (3.71 per cent), Metal (3.23 per cent), Oil & Gas (2.87 per ent) and Power (2.01 per cent).

The volumes in the cash market recovered after the sharp dip last week on account of Christmas holidays. On NSE the turnover was Rs 9,062 crore as compared with Rs 7,248 crore on the previous trading day.

On the BSE, the turnover was Rs 3,411 crore as compared with Rs 3,175 crore on the previous trading day.

The Future & Options turnover on NSE also recovered from Friday lows of Rs 24,153 crore to Rs 33,326 crore.