Sensex jumps 473 points; Capital goods, auto stocks hog limelight

The BSE benchmark Sensex today surged over 473 points to 18,202.20, biggest single-day gain in nine months, as easing inflation and end of turmoil in Egypt encouraged investors to buy fundamentally sound stocks that were recently beaten down on poor sentiment.

The Bombay Stock Exchange benchmark index Sensex, which dipped to a 7-month low in the previous few days, bounced back for the second session by surging 473.59 points to 18,202.20, after touching the day’s high of 18,227.62.

The 30-share index Sensex has lost 14 per cent from the record level on November 5, as high inflation and increasing central bank rates pushed up the borrowing costs for the industry as well as the consumer.

The broad-based National Stock Exchange index Nifty zoomed up 146 points to 5,456 and touched the intra-day high of 5,463.80.

The gauge recorded a biggest single session rise after May 10, as the Egyptian President, Mr Hosni Mubarak, resigned, easing concerns about high oil prices that stoke the overall inflation.

Meanwhile, the WPI inflation declined marginally to 8.23 per cent in January from 8.43 per cent in the previous month, as the prices of certain commodities like wheat, pulses and sugar eased, although essential items like onions and other vegetables remained costly.

Brokers said the market was in the over-sold mode and the current rise forced speculators to square up their pending long positions. They said easing tension in West Asia also kept the global markets higher.

Asian stocks advanced, rebounding from the biggest weekly decline since August, after Japan’s economy shrank less than estimated. European markets also opened higher.

The rally was supported by the stocks of Tata Motors, Hero Honda, Maruti Suzuki, Bajaj Auto, BHEL, Larsen and Toubro, Infosys, Tata Consultancy Services, State Bank of India, HDFC Bank, ICICI Bank, Tata Steel and Tata Power.

Capital goods, auto and metal sector stocks remained on the fore-front on expectations that easing inflation would bolster growth and raise the demand for infrastructure.

The most-heaviest on the Sensex, Reliance Industries, rose by Rs 4.60 to Rs 915.20 and the second heaviest Infosys Technologies was up by Rs 63.95 to Rs 3,104.55. The two carry nearly 23 per cent weightage on the index.

As the buying activity spilled over a wide-front, the small-cap sector index rose by 3.94 per cent to 8,116.62 and the mid-cap index by 3.52 per cent to 6,703.82.

COMMENT NOW