Markets extend rally; realty, metals shine

This is the highest closing for both the indices since May 15.

Benchmarks defied gravity for the second straight session on Thursday as investors piled into recently-beaten down realty, metals, energy and banking stocks.

Small and mid-cap counters too saw renewed buying interest, a day after RBI eased NPA classification norms for MSMEs.

Short-covering by speculators and sustained buying by domestic institutional investors added to the momentum, brokers said.

The BSE Sensex, which had vaulted over 425 points in intra-day trade, finally ended at 35,463.08 -- up 284.20 points. The broader NSE Nifty jumped 83.70 points to 10,768.35.

This is the highest closing for both the indices since May 15.

The benchmarks had rallied yesterday as well after the RBI hiked the policy rate on inflation concerns but maintained its neutral stance and growth outlook.

With the rate hike out of the way, participants are now focussing on improved growth-inflation dynamics for the Indian economy, analysts said.

The 30-share BSE Sensex opened on a strong footing at 35,278.38 and maintained its upward trend to hit the day's high of 35,628.49.

It finally ended at 35,463.08, up 284.20 points, or 0.81 per cent.

The broader Nifty finished the day at 10,768.35, showing a gain of 83.70 points, or 0.78 per cent, after shuttling between 10,818.00 and 10,722.60.

Meanwhile, domestic institutional investors (DIIs) net bought shares worth Rs 712.31 crore, while foreign funds sold equities to the tune of Rs 81.40 crore on Wednesday, provisional data showed.

"The gradual tightening by the RBI with a focus to get a balance between inflation and growth has given energy to the market.

"Mid and small caps outperformed as investors find value buying opportunity after the recent nosedive. Progressing monsoon and positive outlook on rural economy is giving boost to the economy, which is already showing signs of improvement," said Vinod Nair, head of research, Geojit Financial Services.

Tata Steel was the top performer in the Sensex pack, spurting 3.73 per cent, followed by Tata Motors at 3.32 per cent.

Other gainers were ICIC Bank 2.52 per cent, Axis Bank 2.48 per cent, Wipro 2.39 per cent, Asian Paints 1.90 per cent, RIL 1.89 per cent, HUL 1.84 per cent, ONGC 1.56 per cent, Infosys 1.23 per cent and Adani Ports 0.79 per cent, among others.

However, Coal India fell 0.69 per cent, IndusInd Bank 0.58 per cent, Kotak Bank 0.57 per cent, SBI 0.24 per cent, NTPC 0.15 per cent and Bajaj Auto 0.12 per cent.

Among sectoral indices, realty rose 2.77 per cent, industrials 1.51 per cent, energy 1.45 per cent, metal 1.44 per cent, infrastructure 1.32 per cent, power 1.23 per cent, oil & gas 1.20 per cent, telecom 1.15 per cent, IT 1.11 per cent, capital goods 1.06 per cent, teck 1 per cent, finance 0.91 per cent, PSU 0.90 per cent, FMCG 0.82 per cent, healthcare 0.76 per cent, bankex 0.69 per cent and auto 0.60 per cent.

Consumer durables was the sole loser, declining 0.23 per cent.

The broader markets also showed a firming trend, with the small-cap index advancing by 1.96 per cent and mid-cap gaining 1.40 per cent.

Global cues were largely positive despite trade headwinds.

In the Asian region, Japan's Nikkei ended 0.87 per cent higher and Hong Kong's Hang Seng rose 0.81 per cent, while  Shanghai Composite shed 0.18 per cent.

In the Eurozone, Frankfurt's DAX rose 0.17 per cent and Paris CAC gained 0.44 per cent in early deals. London's FTSE too was up 0.50 per cent.

Photograph: Shailesh Andrade/Reuters