The market surged today after a two-day rout on speculation more funds will move to emerging markets after an emergency 75 basis points cut announced by the US Federal Reserve on Tuesday, 22 January 2008. Sensex posted biggest ever single day absolute gain. Prior to todays rally, the market had consistently posted losses for seven straight days. On the flip side total turnover was subdued on BSE. Also despite the rally the market breadth on BSE stayed negative.

Trading was choppy throughout the day. The market opened with a spurt but immediately pared gains. It started firmed up again in mid-morning trade supported by firm Asian markets.

European markets opened higher but most of them slipped in the red as the day progressed.

The BSE Sensex advanced 864.13 points or 5.17% to 17,594.07, its biggest ever single day gain in absolute terms. It also registered its biggest ever intra-day gain of 1267.17 points when it hit days high of 17,997.11. Sensex hit a low of 16,951.03 in early trade. At the days low, the Sensex was up 223.02 points for the day.

The BSE Sensex suffered a sharp loss of 2283.76 points or 12.01% in just prior trading sessions on weak global markets, heavy FII unwinding and squaring of leveraged positions

The broader CNX S&P; Nifty surged 304.10 points or 6.21% at 5,203.40. It struck a high of 5,328.05 in mid-afternoon trade. Nifty January 2008 were at 5164, a sharp discount of 39.40 points as compared to spot closing

Sanity returned to the bourses after a bloodbath witnessed on the street in the past two trading sessions when share prices had declined like nine pins. US Federal Reserve came to the rescue cutting key US interest rates by a steep 75 basis points late on Tuesday, 22 January 2008, after Indian markets had closed. The US central bank's move followed two days of steep losses in Asian and European equities on worries that a deteriorating US economy would drag other regions down with it. The US economy has been hit hard by rising defaults in the sub-prime mortgage sector in which Americans with bad credit records are struggling to pay back housing loans given to them during the housing boom.

Margin calls had created havoc on the Indian bourses in the last two days causing a steep decline in share prices that was initially triggered by a setback in global markets and selling by foreign institutional investors. Margin trading is where investors trade shares without paying the full cost of the share. Instead a margin or percentage is paid as collateral, and when the market moves against the investor, the margin needs to be topped up. If the investor does not make payment, the shares can be sold by the broker. A margin call is also triggered when shares that an investor had bought with borrowed money decrease in value. If the investor is not able to put up additional margin, the broker/financer will resort to sale of shares.

The US Federal Reserve in a surprise move on Tuesday, 22 January 2008, cut Fed funds rate and discount rate by 75 basis points each. The Fed funds rate is now at 3.5%. It is the largest rate cut in one shot for the first time in 24 years. The US central bank's move followed two days of steep losses in Asian and European equities on worries that a deteriorating US economy would drag other regions down with it.

The total turnover on BSE amounted to Rs 7099 crore as compared to Rs 6,861.32crore yesterday, 22 January 2008. The turnover has been dull for the second straight day probable as many investors were unable to buy or sell stocks in cash market due to closure of terminals of brokers.

Similar was the case with NSE futures & options turnover which declined to Rs 36073.86crore from Rs 44307.58 yesterday 22 January 2008.

Despite the rally, the market breadth was negative on BSE: 1401 shares declined as compared to 1302 that rose. 23 shares remained unchanged.

The BSE Mid-Cap index surged 8.15% to 7789.31 while the BSE Small-Cap index gained 3.96% at 10,425.34.

All the sectoral indices on BSE registered sharp gains.

BSE Bankex (up 5.64% at 10731.24), BSE IT index (up 5.45% at 3631.37). BSE Metal index (up 6.85% at 15081), BSE Oil & Gas index (up 8.73% at 10845.58), BSE Power index (up 9.81% at 3943.23), BSE Realty index (up 11.44% at 10609.67), BSE PSU index (up 6.77% to 8,500.83) and BSE Consumer Durables index (up 5.23% to 5,181.51), outperformed the Sensex.

BSE Capital Goods index (up 4.67% at 17221.13), BSE FMCG index (up 5.01% at 2100.34), BSE Health Care index (up 4.35% at 3627.42), BSE Auto (4.46% at 4675.33), BSE TecK index (up 4.82% to 3,248.68), underperformed the Sensex

All the 30-members of Sensex pack advanced.

India's largest power utility company Reliance Energy surged 16.76% to Rs 2004 after the company today said it had won a railway project worth Rs 2500 crore from the Delhi Metro Rail Corporation, in consortium with Spain's CAF. It was the top gainer from Sensex pack.

Indias largest generation company in terms of net profit National Thermal Power Corporation galloped 13.25% to Rs 222.75 on high volumes of 65.99 lakh shares. As per reports the company plans to invest Rs 1,729 crore for development of the Jharkhand coal mine.

IT pivotals saw value buying. Satyam Computers (up 10.25% to Rs 391), TCS (up 7.47% to Rs 859), Infosys (up 2.86% to Rs 1417), and Wipro (up 1.43% to Rs 435) logged gains

Banking and financial shares surged on hopes of a rate cut from the Reserve Bank of India following the Fed rate cut. Indias largest dedicated housing finance company in terms of revenue Housing Development Finance Company surged 3.21% to Rs 2560.

ICICI Bank, the countrys largest private sector bank in terms of net profit, gained 4.89% to Rs 1179.70. State Bank of India, the country's largest bank in terms of net profit vaulted 8.56% to Rs 2344

HDFC Bank jumped 6.83% to Rs 1538. On Monday, 21 January 2008, HDFC Bank reported 45.2% rise in net profit to Rs 429.36 on on 59.70% rise in total income to Rs 3405.79 crore in Q3 December 2007 over Q3 December 2006.

Grasim Industries rose 4.77% to Rs 2996. The company during trading hours on Tuesday, 22 January 2008, reported 34.55% rise in net profit to Rs 553.79 crore on 15.93% rise in total income to Rs 2694.96 crore in Q3 December 2007 over Q3 December 2006.

Indiaa largest private sector firm by market capitalization and oil refiner Reliance Industries surged 8.48% to Rs 2558. 13.10 lakh shares changed hands on the counter on BSE

India's top commercial vehicles maker by sales Tata Motors rose 1.76% to Rs 669.80 on reports that the company has signed a development contract with Chrysler LLC for developing electric vehicles.

Shares from real estate shares galloped on hopes of a cut in interest rate by the Reserve Bank of India following a surprise rate cut from the US Federal Reserve yesterday, 22 January 2008.

Omaxe (up 41.91% to Rs 318.95), Peninsula Land (up 44.23% to Rs 104.05), Anant Raj Industries (up 20% at Rs 330), Parsvnath Developers (up 15.67% at Rs 291.90), Ansal Properties and Infrastructure (up 30.80% at Rs 292), Housing Development and Infrastructure (up 18% at Rs 1000), Unitech (up 12.49% at Rs 395) and DLF (up 6.60% at Rs 925) surged. The fortunes of real estate companies are directly linked with interest rates.

Reliance Natural Resoruces was the most active counter on BSE with turnover of Rs 465.92 crore followed by Reliance Petroleum (Rs 356.47 crore), Reliance Industries (Rs 330.60 crore), ICICI Bank (Rs 256.46 crore) and Reliance Energy (Rs 231.02 crore) in that order

Ispat Industries led the volume charts clocking total volumes of 3.46 crore shares followed by Reliance Natural Resources (3.44 crore shares), Reliance Petroleum (2.13 crore shares), Tata Teleservices (Maharashtra) (1.53 crore shares) and IFCI (1.49 crore shares) in that order.

Among the side counters, Sterlite Technologies (up 43.59% to Rs 226.80), Edelwiess Capital (up 35.10% to Rs 1159)