Ignoring the US deficit imbroglio, the BSE Sensex and the NSE Nifty surged on Wednesday, the former regaining the 20,000-mark and the latter the 6,000-mark for the first time since September 20.

Rise in information technology, healthcare and metal stocks helped the indices close above the psychological marks.

Today’s gain came mainly on the back of favourable trade deficit data, which narrowed to the lowest level in 30 months.

Investors have been betting on information technology counters on expectations of good financial performance due to weak rupee and on rising demand, particularly from the US. Infosys will be the first company to announce its July-September quarter numbers on Friday.

Sentiment has turned positive after Raghuram Rajan took over as the RBI chief. The RBI’s pro-market initiatives and easy liquidity measures bolstered the confidence on the rupee, which recovered from an all-time low of 68.9/$ to the current 61-62/$ levels. Most IT stocks, including TCS and HCL Technologies, have either touched their all-time peaks recently or nearing the milestone.

Foreign institutional investors also reposed confidence in the Indian markets by pumping in over Rs 2,500 crore in October so far. On Wednesday, FIIs net bought Rs 326 crore worth shares even as domestic investors remained sellers to the tune of Rs 97 crore.

What is interesting about the current rally is that beaten down sectors, such as realty, infrastructure, capital goods and banking have also participated, indicating growing confidence in the Indian markets, said an analyst with a Mumbai-based brokerage.

Among the sectoral indices, IT was the top gainer, up 1.36 per cent, followed by technology and metals, which were up about 0.90 per cent. Healthcare was also a major gainer.

badrinarayanan.ks@thehindu.co.in

(This article was published on October 9, 2013)
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