BSE Sensex rises 387 pts,posts highest gain in seven months

Led by banks,auto,capital goods and power shares,the Sensex surged to day8217;s high of 18,771.33 and finally settled at 18,744.93 8212; a gain of 387.13 points or 2.11 per cent,the biggest jump since 403.58-point rise in September 2012.

The NSE 50-share Nifty also ended higher by 120.55 points or 2.16 per cent to finish at 5,688.95. Across the market,investor welath rose by over Rs 1 lakh crore to Rs 64.24 lakh crore as nearly 1,400 stocks rose.

8220;Market is seen discounting falls in gold and crude oil prices that are likely to bring down current account deficit CAD. Also,lower-than-expected inflation has raised hopes for RBI to cut key interest rates,8221; said Nidhi Saraswat,Senior Research Analyst,Bonanza Portfolio.

ICICI Bank,HDFC,HDFC Bank and SBI saw good buying on rate cut hopes. Similarly,Maruti Suzuki,Tata Motors,Mamp;M,Hero Motocorp and Bajaj Auto registered smart gains.

Oil and gas related stocks like ONGC and RIL rose further after Brent crude oil fell today in London market. RIL is expected to post Q4 earnings later in the day.

Tata Power today closed 2 per cent higher after CERC allowed it to raise power tariffs to compensate for an unexpected increase in coal cost.

However,stocks of gold finance companies remained under pressure with Mannappuram Finance and Muthoot Finance dropping by nearly 10 per cent each. Overturning fears of foreign investors about fiscal deficit,Finance Minister P Chidambaram has said India was committed to reducing its fiscal deficit and would achieve the target of 3 per cent in 2016-17. 8220;India will reduce the fiscal deficit until we reach the target of 3 per cent in 2016-17 or perhaps a little earlier,8221; he said yesterday in Canada.

Stock markets today saw buying across-the-board as 11 out of 13 sectoral indices closed with gains in 0.72-2.94 per cent range. The Bankex,Auto,Capital Goods,Power and Realty indices were the forefront while only Samp;P BSE-IT and Samp;P BSE-Teck closed lower. Overall,28 out of 30 Sensex-based scrips ended with gains. Infosys and Sterlite closed down.

8220;The recent deceleration of gold and crude prices is also constructive for macros since these items account for about 40-45 per cent of our total imports and a correction is likely to lend a favorable bias to the current account deficit,which is one of our key concern areas,8221; said Lalit Thakkar,Managing Director 8211; Institution,Angel Broking.

Globally,Asian stocks reversed their intra-day losses and closed mixed with upward bias. Key indices from China,Singapore,South Korea and Taiwan settled with gains while from Hong Kong and Japan concluded with losses.

However,European markets were trading lower in their early trade on worries over the global economic growth. France8217;s CAC was down by 0.70 per cent,Germany8217;s DAX 0.68 per cent and the UK8217;s FTSE by 0.66 per cent.

Back home,Maruti Suzuki was the top gainer from theSensex pack with a rise of 4.23 per cent. Mamp;M,ONGC,HDFC,Dr Reddy8217;s Lab,Hero MotoCorp,HDFC Bank,Lamp;T,ICICI Bank,ITC,Bajaj Auto,Jindal Steel,NTPC,Sun Pharma,HUL,BHEL,Tata Power,Bharti Airtel,Hindalco,SBI,RIL,Tata Steel and Gail India clocked smart gains in 1.13-3.95 per cent range.

Market breadth remained positive as 1,338 scrips finished higher while 1,022 ended lower. Total turnover moved down further to Rs 1,889.42 crore from Rs 1,931.84 crore yesterday.

Meanwhile,Foreign Institutional Investors FIIs sold shares worth Rs 418.37 crore yesterday as per provisional data with stock exchanges.