The Bombay Stock Exchange's Sensex surged higher in line with other global peers after the world's major central banks decided to provide cheap US dollar loans to European banks.
All the sectoral indices were in the green with metals, banks and auto stocks leading the rally. However, according to analysts, the global and domestic problems are not over and investors should not get carried away.
"Brace for a gap-up opening. No, nothing has changed on the domestic front - things continue to be quite bleak. But a coordinated move by world's top central banks to ease market tension has sent stocks soaring world over.
A cut in reserve ratio by the Chinese central bank also added to the cheer. Suddenly all bad news is being overlooked. The Dow closed above 12,000 and also surpassed 200 DMA, a key technical hurdle. It was the blue chip US index's best showing since March 2009.
The problems are really not over yet though. The recent series of downgrades (or warnings) by rating agencies and contraction in China's manufacturing space are cases in point.
For India too, the picture looks quite gloomy with infrastructure growth barely expanding in October and fiscal deficit at almost 75% of FY12 estimate. The ongoing pandemonium in parliament and political logjam over FDI in retail are only adding to home-grown problems. However, it seems like markets may hold firm today, at least in the morning. So, make the most of it but don't get carried away as near-term prospects remain bad," said IIFL report.
At 9:55 am; the Sensex was at 16568.76, up 445.30 points or 2.76 per cent. The 30-share index touched intraday low of 16555.93 and high of 16718.11.
The National Stock Exchange's Nifty was at 4970.20, up 138.15 points or 2.86 per cent. The broader index touched a high of 5011.90 and low of 4964.95 in trade so far.
BSE Midcap Index was up 1.78 per cent and BSE Smallcap Index gained 1.45 per cent.
All the sectoral indices were in the red. BSE Metal Index was up 4.33 per cent, BSE Bankex gained 4.20 per cent, BSE Auto Index advanced 3.29 per cent and BSE Realty Index moved 3.21 per cent higher.
Sterlite Industries (7.60%), Hindalco Industries (7.22%), Tata Motors (6.44%), ICICI Bank (6.22%) and Tata Steel (5.09%) were the top Sensex gainers.
There were no index losers.
Market breadth was positive on the BSE with 1494 gainers against 352 losers.
Meanwhile, the Asian markets were witnessing a sharp rally. Nikkei 225 was up 2.50 per cent, Hang Seng rallied 5.85 per cent and Seoul Composite moved 3.84 per cent higher.
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