Markets end strong on good GDP nos, hopes of free fuel pricing

29 May 2009

The benchmark indices showed spectacular performance on the first day of June series. Positive announcements from the oil ministry about deregulation of oil prices and better-than-expected GDP (Gross Domestic Product) numbers elevated the confidence level among the investors and helped the markets to remain on the higher side.

Good global cues also aided the positive momentum. Infrastructure (capital goods + power), oil & gas, metal, realty, auto, telecom and technology stocks witnessed huge buying interest.

Better-than-expected GDP numbers cheered the markets; Growth number for the full year, FY2008-09, came in at 6.7% versus a projection of 7.1%. The GDP growth for the last financial year, FY08, stood at 9%. The numbers for the fourth quarter of FY09 also came in at 5.8% versus 5.8% last quarter and 8.8% a year ago. A CNBC-TV18 poll conducted earlier saw the fourth quarter GDP number at 5.24% and for the full year, for FY09 the poll saw GDP to be at 6.52% as against 9% last year.

The oil ministry said that deregulation of oil prices would be taken up by the Cabinet soon and added that tax breaks for gas production would also be taken up shortly. The Ministry said it planned to re-launch New Exploration Licensing Policy (NELP) VIII soon. The Ministry further stated that it would consider the decontrol of APM gas after the oil product deregulation.

Speaking on the impact, VK Sharma of Anagram Sharma said. ''I think it is worthwhile and it will give oil marketing companies as well as ONGC and GAIL some levy from having to bear the burden. The government too will not have to do that much. So I think it augers well for not only marketing companies but the others also for ONGC and GAIL.''

The 30-share BSE Sensex surpassed the 14,700 during the day and touched an intraday high of 14,727.28, up 431.27 points. But the some profit booking at higher levels wiped out some gains. It closed 329.24 points or 2.3% higher at 14,625.25. The 50-share NSE Nifty surged 150.95 points to touch a high of 4488.05, before closing at 4448.95, up 2.58% or 111.85 points.