Markets close higher led by banks, IT, metal, RIL, ONGC

12 March 2009

The benchmark indices closed on a positive note led by gains in shares of oil & gas exploration, banking, metal, technology, capital goods and auto companies. Today's rally can be attributed to the sharp jump in the US markets that was seen on Tuesday.

Frontliners like Reliance Industries, ONGC, ICICI Bank, HUL, BHEL, Infosys, TCS, L&T, SAIL, Reliance Communication, SBI, HDFC, Sterlite and Maruti Suzuki helped the markets. However, the sell-off in Bharti Airtel, NTPC, DLF, Tata Power, Suzlon, Idea and Ranbaxy Labs has capped the gains.
 
The 30-share BSE Sensex has touched an intraday high of 8,439.71, before closing the day at 8,343.75, up 2.25% or 183.35 points. The 50-share NSE Nifty gained 44.30 points or 1.72%, to settle at 2,617.45, after hitting a high of 2646.10. Both indices have lost 96 points and 29 points from their highs, respectively.

There was a short covering in banking stocks today; BSE Bankex shot up 120.99 points or 3.33%, to 3,754.22. Axis Bank and ICICI Bank surged over 8% each. SBI gained 1.57%. Among other banking stocks, IOB, Karnataka Bank, Bank of India, PNB, Bank of Baroda, Kotak Mahindra, Andhra Bank, Union Bank and Allahabad Bank went up 1.5-5.9%. HDFC Bank was up just 0.09%.

However, Bharti Airtel remained under pressure throughout the session, plunged 6.37%, to close at 550.30. Volumes have seen a jump of 224.32%, to 2,448,190 shares, compared to its 5-day average of 754,880 shares.
 
Inflation has continued its downtrend while IIP data was more or less at the same level of December. Both were non-events for the markets.

The January Index of Industrial Production (IIP) number has come in at -0.5% versus -0.6% in December 2008. The December figure of -2.2% has now been revised to -0.6%. The year-on-year comparison: the January 2008 figure stood at 6.18%.
 
''The worst is behind us,'' Shubhada Rao, Chief Economist at Yes Bank said, reacting to the January numbers. ''We clearly see an uptick in the February and March IIP numbers.''
 
Inflation for the week-ended February 28 came in at 2.43% versus 3.03% week-on-week (WoW). This was the lowest inflation number since June 2002. In June 2002, inflation was reported at 2.18%; its lowest level was 1.13% on February 2, 2002.
 
Shubhada Rao, feels inflation in the coming weeks would play out of a base effect. She feels rate cuts would help improve investor sentiment. Inflation now, said Rao, is a non-event as all eyes from the bond market perspective are shifting to the supply concerns where yields are telling the big story.
 
Sectoral indices
BSE Auto Index outperformed other indices, gained 96.12 points or 3.70%, to settle at 2,695.27.

Oil & Gas Index surged 180.76 points or 3.21%, to 5,814.64, due to gains in shares of oil & gas exploration companies. Reliance Industries and Reliance Petroleum were up 4% each. ONGC went up 2.46%.