Domestic stocks markets held on to their positive momentum, backed by solid global cues. The Sensex surged nearly 600 points to 25,870 while the Nifty rallied 200 points very close to the 7,950 mark.
All sectoral indices on the Bombay Stock Exchange traded in the green. Interest rate sensitives like banks and auto led the rally from the front. The Bank Nifty and the BSE Bankex soared 500 points each.
The market breadth remained strong as about two shares advanced for every share rising.
Global investment bank Morgan Stanley has upgraded its outlook on India to ‘overweight’ from an ‘equal weight’ rating. While the bank hasn’t given any target for the index, it says that certain key events will help boost market sentiments.
ICICI Bank was the biggest Sensex gainer – surging nearly 5 percent. Bajaj Auto rallied more than 4 percent after the two-wheeler maker’s fourth quarter earnings met analysts’ expectations. Other index heavyweights like L&T, BHEL, SBI, Maruti and HDFC added to gains. Cipla was the only stock in the red on the Sensex after disappointing quarterly numbers.
Buoyant Rupee
Reversing its nine-day losing trend, the rupee recovered 20 paise to 67.55 against the US dollar in early trade on fresh selling of the American currency by exporters and banks amid a higher opening in the domestic stock markets.
Forex dealers said weakness in the dollar against other currencies overseas also supported the rupee.
Positive Global Backdrop
Easing concerns over several major global risks helped stock markets rise robustly for a second day on Wednesday, underpinned by gains in oil and metals prices and data showing the US economy can deal with a hike in interest rates.
Traders say several polls showing Britain will vote strongly to stay in the European Union in a referendum in June have done more than just support sterling, up 5 percent in trade-weighted terms from lows hit in April.
A new debt deal for Greece also looked to have headed off the risk of another round of uncertainty over its finances and even its future in the euro zone after a funding crisis a year ago, pushing European stock markets higher across the board.
Earlier in the day, Asian shares jumped, taking cues from sharp gains in US markets, while the dollar firmed as upbeat US home sales supported the view that the economy may be strong enough for the Federal Reserve to raise interest rates in coming months.
MSCI’s broadest index of Asia-Pacific shares outside Japan , however, rose 1.8 percent, their best one-day gain since late March. Japan’s Nikkei closed up 1.6 percent as exporters got a boost from a weaker yen.
Hong Kong’s Hang Seng index gained 2.4 percent, but China shares surrendered early gains and slipped into the red amid concerns about sluggish growth in the world’s second-largest economy.
(With agency inputs)
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