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Markets surge on strong global cues

By Jinsy Mathew
Last updated on: September 07, 2012 16:17 IST

In the broader markets, the midcap and the smallcap indices continued to underperform with 1 per cent and 0.7 per cent gain respectively as compared to the 2 per cent gain on the Sensex.

Asian markets soared after the European Central Bank outlined its bond buying scheme in an attempt to draw a line under the region's debt crisis.

Stronger-than-expected jobs data from U.S. private sector, which bode well for the key U.S. non-farm payroll figures due out on Friday, also encouraged investors to cover their bearish bets. Nikkei added 2.2 per cent, Shanghai Composite soared 3.7 per cent and Hang Seng jumped 3.7 per cent, respectively.

In the European markets, CAC and DAX gained 1 per cent each while FTSE marginally advanced by 0.2 per cent.

The rupee continued to rule firm against the American currency in late morning session by gaining 26 paise to 55.40 against dollar on sustained selling of dollars by banks and exporters.

All the sectoral indices traded in the positive zone. BSE capital goods index jumped 3 per cent, followed by metal, realty,bankex and auto up 2 per cent.Consumer durables and oil & gas indices were up 1.8 per cent each as well.

From the Capital Goods space, L&T and BHEL added 2-4

per cent each.

Tata Steel, Hindalco, Sterlite, Sesa Goa and Hindustan Zinc up 2-6 per cent were the movers in the metal space. Among the banks, ICICI Bank, Canara Bank, Axis Bank, Yes Bank and SBI gained 2-5 per cent.

Index heavyweight, Reliance Industries gained 3 per cent to close at Rs 791 after CLSA raised its target price on Reliance stock to Rs 850 from Rs 790 while maintaining its "outperform" rating. CLSA believes that a combination of growth, benign consensus expectations, below-average valuations and buyback support will help the upmove.

Shares of oil marketing companies were under pressure after Jaipal Reddy, union petroleum minister said there was no immediate plan to raise price of petrol or any oil product. Bharat Petroleum Corporation slipped 1 per cent, Hindustan Petroleum Corporation was down 2 per cent at Rs 303 and Indian Oil Corporation (IOC) closed flat with a negative bias at Rs 246.

Among individual stocks, Deccan Chronicle Holdings was up 10 per cent at Rs 13.45 on reports that the company has put its Indian Premier League franchises Deccan Chargers for sale.

The market breadth was strong with 1777 stock advances as compared to 1084 declines on the BSE.

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Jinsy Mathew in Mumbai
Source: source