Follow Us:
Thursday, July 19, 2018

7-month high: Sensex up 485 points on L&T stock surge, rebound in oil prices

Sentiment remained sunny as oil advanced to USD 50 a barrel for the first time this year as US industry data showed a decline in stockpile.

By: ENS Economic Bureau | Mumbai | Updated: May 27, 2016 1:20:35 am
sensex, sensex today, today sensex, today markets, markets, markets today, india markets, asia markets, nifty news,BSE Sensex , business news Photo for representational purpose

Led by Larsen & Toubro shares, domestic stock markets jumped by over 485 points to a nearly seven-month high on rebound in crude oil prices, good fourth quarter numbers and expectations of further economic reforms in the third year of the Modi government.

With this gain, the Sensex has vaulted by 1,061 points in the last two days. The Sensex opened strong and surged further before settling at 26,366.68, a solid gain of 485.51 points, or 1.88 per cent. The barometer ended at 26,552.92 on November 4 last year. The index had gained 576 points on Wednesday on strong reform measures from the Centre and firm global cues. The 50-share NSE Nifty ended at 8,069.65, a hefty gain of 134.75 points, or 1.70 per cent.

The rupee strengthened by another 16 paise to 67.17 against the dollar.

According to analysts, improvement in March quarter numbers — especially L&T — on the last leg of the earnings season showed that the economy is gaining traction, which buoyed the sentiment further. L&T had reported 18.55 per cent rise in Q4 profits on Wednesday. L&T stock skyrocketed by 14 per cent to Rs 1,472.60 on the BSE. The BSE Capital Goods Index surged by 8.78 per cent as investors went on a buying spree in L&T, Bhel and Siemens stocks. On the other hand, oil broke past the $ 50 per barrel for the first time this year after data showed US crude inventory declined, which kept Asian markets too in good spirits.

Seeing the writing on the wall, traders covered up short positions on expiry of May month series of derivative contracts. Adding to the bullish fervour, private agency Skymet has forecast a better-than-expected monsoon this year with a rainfall of 109 per cent of long period average, up from its earlier forecast of 105 per cent. Other major gainers were SBI (4.91 per cent), BHEL (4.73 per cent), Axis bank (3.35 per cent) and ONGC (3.09 per cent). Capital goods rose 8.78 per cent, followed by banking 2.22 per cent, realty 1.82 per cent and power 1.51 per cent.

Share This Article
Related Article

Jayant Manglik, President, Religare Securities, said, “Nifty extended its jubilation for second day in a row and concluded the F&O expiry on a robust note. Firm global cues and better than expected results of select index majors pushed the markets higher in early hours. Besides, appreciation of the rupee against the US dollar added to the positivity. Above all, it seems that pace of surge caught the bears completely by surprise especially before the derivative expiry, which led to short covering across the board and aided the index to close around the day’s high.”

According to Shreyash Devalkar, Fund Manager, BNP Paribas Mutual Fund, positive overseas stock markets also gave a fillip to the domestic sentiment after gains in crude oil prices boosted investors’ risk appetite. “Brent crude prices surpassed the $ 50 mark for the first time this year, after data showed a sharper-than-expected drawdown in US crude stocks last week. On the sectoral front, with the exception of the pharma index which traded in the red, all other sectoral indices traded with gains,” Devalkar said.

For all the latest Business News, download Indian Express App