Nifty at 19-month high, Sensex rallies 329 points

The Sensex and Nifty vaulted to their highest levels in 22 months and 19 months respectively amid record trading turnover on Thursday, as buyers chased auto, banking, realty and capital goods shares. Click here for sectoral gainers

The Sensex closed at 19170.91, up 328.83 points or 1.75% over its previous close, and the Nifty closed at 5825.00, up 97.55 points or 1.70%. This is the second consecutive session of 300-plus-point gain for the Sensex. Click here for full chart

Brokers attributed the surge to a combination of short covering in the derivatives segment and sentiment-driven purchases following positive comments from global players like ratings agency Moody's and investment bank Goldman Sachs, in the last couple of days.

We forecast India's GDP growth to accelerate from 5.4% in 2012 to 7.2% in 2014, and remain high through 2015-2016,'' said a Goldman Sachs strategy note, citing declining oil prices, favorable external demand outlook and domestic structural reforms as the key triggers. Full article

Nifty December futures closed at 5871.40, a premium of 36.40 points to spot, reflecting the bullish near term outlook on the market.

Combined traded turnover on both exchanges combined was a record 3.4 lakh crore, which is more than the market capitalization of SBI, HDFC and ICICI Bank put together. Click here for turnover

ICICI Bank, Tata Motors, Bajaj Auto, Larsen & Toubro, HDFC, and HDFC Bank led gainers in the Sensex, climbing 3-5%. Click here for top gainers

With today's gain, the Sensex has rallied over 600 points in the last couple of trading sessions.

Indiabulls Financial Services, Suzlon, Unitech, Opto Circuit, and IRB Infra were the star performer among midcaps, rallying 6-9%. Click here for Midcap gainers

But there are enough skeptics who feel the market may struggle to sustain at higher levels, as investors appear to be ignoring deeper problems like tepid corporate earnings growth and worsening macro-economic indicators.

While second quarter earnings were just about in line with market estimates, the majority view is that it could be a while before analysts start upgrading their earnings estimates.

High inflation and widening current account and fiscal deficits pose a major risk to sovereign rating even though some rating agencies like Moody's may have assigned a 'stable' outlook on the rating.

"We maintain our view that as the UPA government is currently in a 'minority', there will be parliamentary uncertainty and challenges. We expect these reforms will take time to have an impact and maintain our growth estimates of 5.4% in FY13 and 6.2% in FY14," brokerage house Citi has mentioned in its latest strategy report.

It has been an extremely strong session for Indian equity, the Nifty had hit 5800, while the Sensex rallied to 19100 led by buying interest in rate sensitives and pharma. The breadth too is encouraging. The Sensex was up 260.91 points or 1.38% at 19102.99, and the Nifty was up 74.60 points or 1.30% at 5802.05.

Barring IT, all BSE sectoral indices were trading in green. The BSE realty index outperformed other sectoral indices; it was up over 3%. Strong buying was also seen in auto, banks and metals stocks.

Sanjay Dutt, director, Quantum Securities says 5,800 breakout is definitely in store very soon . "I will not speculate on 6,000, but I think the market would remain on a positive note right through the month of December," he adds.

According to him, positive resolution of 'fiscal cliff', EU stability will support the current rally. "The Nifty may find strong support at 5,400," he asserts.

Apollo Hospitals plunged 7.5% after Apex Partners sold over 85 lakh shares via a block deal today, at the lower end of the indicated price band of Rs 824-876 a share.

Geodesic added over 10% after the board gave a go-ahead for a buyback up to 25% of the equity at a maximum price of Rs 75 a share.

Top gainers on the Sensex were Sterlite Ind at Rs 106.70 up 4.66%, Tata Motors at Rs 278.10 up 4.39%, Bajaj Auto at Rs 1,936.55 up 4.15%, Cipla at Rs 403.70 up 3.22% and ICICI Bank at Rs 1,064.80 up 2.95%.

Refinery major HPCL was trading at Rs 283.80 up 2.4% from its previous close of Rs 277.15. Cigarette major ITC was trading at Rs 296.75 up 1.04% from its previous close of Rs 293.70.

Most active shares on BSE were Apollo Hospital, United Spirits, Karnataka Bank, HDIL and Jet Airways. However, Tech major Infosys was trading at Rs 2,439.25 down 1.21% from its previous close of Rs 2,469.15.

Globally too, it was a firm session across Asia. Nikkei, Kospi and the Taiwanese indices were all up nearly a percent each on hopes of a a budget deal before the end of the year to avoid the US fiscal crisis.

The Sensex today breached the 19,000-mark for the first time in nearly two-months on persistent fund inflows on expectations that the government will be able to push through economic reforms.

The 30-share barometer opened on a positive note and further picked up the momentum to to trade 192.13 points, or 1.02 per cent, higher at 19,034.21, a level last seen on October 5 (intra-day) this year.

Stocks of consumer durables, FMCG, realty and auto sectors were in keen demand, helping Sensex to regain the 19,000 level. The BSE benchmark

Sensex has rallied over 336 points in the previous two sessions, after credit rating agency Moody's said that India's outlook is stable.

Brokers said investors were optimistic that the government will be able to push through economic reforms including Foreign Direct Investment (FDI) in retail. "Sustained foreign funds inflows on hopes that the government would be able to push through economic reforms in Parliament, helped Sensex to breach 19k level", Delhi-based stock broker Manoj Choraria said.

The 50-share NSE Nifty followed suit and shot up by a whopping 69.0 points, or 0.88 per cent, to trade at 5,796.50.

Equity benchmarks built on their early gains, with the BSE Sensex now up close to 200 points at 19039. The December series of Nifty futures were quoting at a 40-point premium to the spot Nifty rate of 5780, indicating that traders were betting on the market to extend its rise next month.

Brokers said the upbeat mood could partly be due to reasons of sentiment rather than fundamentals.

"December is very kind to equities. Going back 32 years to 1980, December has produced a 4.6% median return with an 80% probabilitythe best for any month in the calendar," said a report by Morgan Stanley .

"Over the past 20 years, 1994, 2000, 2001 and 2011 are the only for occasions when December generated negative returns," the report said.

Realty, auto and FMCG shares are the big gainers in the first hour of trade. HDIL, Videocon and Eicher Motors were among the top gainers in the midcap space, up 4-5%.

Apollo Hospital was the biggest loser, down over 9% to Rs 792 on heavy volumes. Market talk is that CLSA has sold its 6.15% stake in the company at a discount to the market price.

Equity benchmarks were firm in early trade, led by strengths in realty, FMCG, banking and metal shares. The Sensex was up close to 100 points at 18939, and the Nifty was up 28 points at 5755.

Brokers said the rise could be partly on short covering of positions in the derivatives segment, today being the expiry of current series of futures and options contracts.

Jet Air and IndusInd Bank figured among the key gainers, rising around 4% each. GMR shares were down nearly 4% on news of the Maldives government asking to company to hand over the management of Male airport within seven days following a dispute over airport development fee.