Home / Business / Sensex rises to 31-month high, up 338 points

Sensex rises to 31-month high, up 338 points

Mumbai: The BSE benchmark Sensex Monday rallied by over 338 points to close at its highest level in two-and-half years as better-than-expected jobs data from the US allayed concerns that global economic growth is faltering.

Led by a sharp rise in metal and banking stocks, coupled with firm global cues, the 30-share barometer of the Bombay Stock Exchange settled the day at 18,560.05, higher by 338.62 points, or 1.86 percent.

This is the best close of the Sensex since February 5, 2008, when it had ended at 18,663.16 points.

The National Stock Exchange’s wide-based Nifty Index rose 1.78 percent to finish at 5,576.95.

Analysts said the rally in local markets was in line with the rebound in world equities on the back of improved growth in private employment and manufacturing in the US, which raised optimism that the global economy will avoid another recession.

“Positive sentiment from the overseas markets helped the local indices to hit the fresh high in about 31 months,” CNI Research CMD Kishor Ostwal said.

Reliance Industries Ltd, which holds the maximum weight in the Sensex, notched up gains of nearly 3 per cent to settle at Rs 953.20. In the last session, the scrip had fallen 1.23 percent.

“Bargain hunting helped RIL to bounce back. That fuelled a rally in the broader market,” Ostwal said.

It was the metal sector that stole the show on Dalal Street. Tata Steel and Hindalco were the top two performers in the Sensex pack. Tata Steel climbed 6.60 per cent, the most in the BSE-30 components.

Hindalco jumped 4.78 percent, after Chairman Kumar Mangalam Birla announced a mega Rs 21,000 crore capex plan for the next two years. Sterlite zoomed 3.69 per cent and Jindal Steel 1.68 percent.

“Metal stocks were in high demand as investors judged the improvement in overseas market will boost demand from Indian companies,” he further said.

Frantic buying was witnessed on financial counters, with ICICI Bank surging 3.81 percent and SBI 3.07 percent. HDFC rose 0.67 percent and HDFC Bank 0.55 percent.

The signs of better economic recovery rate in the world’s largest economy, the US, also triggered buying in IT stocks. IT bellwether Infosys added 2.16 per cent, TCS 1.89 percent and Wipro 0.82 percent.

All the sectoral indices on the BSE settled in the green, with metal, banking, realty and oil & gas leading the gains. These sectors rose in the range of 2 to 3.5 percent.

DLF rose by 1.66 percent and Jaiprakash Associates 3.28 percent. Other major gainers were Maruti, which rose by 2.45 percent, and Tata Power, up 2.28 percent.

In the BSE-30 pack, 26 stocks ended with gains, whereas four scrips lagged behind and settled in the red.

Anil Ambani-led RCom fell 0.31 percent, after a proposed Rs 50,000 crore deal to merge the telecom tower assets of Anil Ambani group firm Reliance Infratel with GTL Infrastructure failed to materialise.

“The move is not surprising as the deal was overvalued and the huge debt in the balance sheets of RCom was a big concern for GTL Infra,” Geojit BNP Paribas Assistant Vice- President Gaurang Shah said.

Hero Honda led the losers pack and ended about 2 percent lower. HUL declined 0.22 percent and L&T 0.07 percent.

On the global front, Asian stocks ended firm and European equities, too, were quoting higher at mid-session.

China’s benchmark Shanghai index rose 1.5 percent and Japan’s Nikkei 2.05 percent.

“Asian stocks rose, driving the MSCI Asia Pacific Index to the highest level in four weeks as better-than-estimated jobs data in the US eased concerns that global economic growth is faltering,” brokerage firm SMC said.

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