The market recovered most convincingly from a recent major correction, tracking firm Asian markets and overnight gains in Indian ADRs. Short-covering in derivatives ahead of next weeks expiry of February 2007 derivatives contracts also aided the surge.
The recovery was broad-based with stocks across segments - small-caps, mid-caps and large-caps - bouncing back. The market also shrugged off data showing a surge in inflation to its highest level in more than two years.
The Sensexs provisional closing was 14,368.82, a gain of 358.92 points. This is the biggest single-day gain in terms of points for the Sensex in a little over a month. The Sensex had spurted 425.82 points to 14,056.53 on 12 January 2007, at the onset of the Q3 December 2006 earnings season, with Infosys unveiling strong numbers on that day.
The market-breadth was quite strong. Against 2,121 shares rising on BSE, 525 declined. Just 33 shares were unchanged. Gainers outpaced losers by a ratio of 4:1.
The BSE clocked a turnover of Rs 4275 crore.
Auto shares held firm after the government announced a cut of Rs 2 per litre in petrol price and Re 1 per litre in diesel. Ashok Leyland surged 5.4% to Rs 46.20, M&M; surged 5% to Rs 900, Maruti Udyog gained 4% to Rs 892 and Hero Honda gained 3.8% to Rs 740.
Tata Motors rose 1.8% to Rs 866. Tata Motors and Fiat on Wednesday unveiled a $80 million agreement to build Tata pick-up trucks under the Fiat brand at the Italian carmaker's plant in Cordoba, Argentina, with annual production projected at 20,000 trucks next year. The news triggered a 2.1% rise in the ADR on Wednesday, to $19.87.
IT shares edged higher tracking overnight gains in their ADRs. Infosys rose 4% to Rs 2382 after its ADR surged 3% on Wednesday to $59.20. Satyam Computer rose nearly 5% to Rs 486.50; its ADR rose nearly 4% to $23.48 on Wednesday. Wipro gained 5% to Rs 683. Its ADR rose 1.2% to $17.92 on Wednesday.
L&T; surged nearly 5% to Rs 1693.90, on bargain-hunting after a sharp correction of late. The company has a robust order-book position.
A strong response to an IPO of the sixth largest cellular service provider, Idea Cellular, boosted telecom shares. Reliance Communications gained 3% to Rs 466. Bharti Airtel gained 3.6% to Rs 789 despite cutting roaming charges. The Idea IPO was subscribed nearly 27 times by 15:00 IST today. The IPO will close today.
Index heavyweight Reliance Industries (RIL) rose 2.3% to Rs 1410, extending a recent upmove. The upstream regulator said last Thursday that crude production from RILs deepwater gas block, off the country's east coast, was commercially viable.
Ranbaxy plunged 5% to Rs 392.25 following reports that criminal investigators for the US Food & Drug Administration yesterday locked the headquarters of Ranbaxy USA.
Bank shares shrugged off a rise in inflation. ICICI Bank gained nearly 4% to Rs 951. The private sector bank's ADR rose 3.2% on Wednesday to $43.61. HDFC Bank gained 3% to Rs 1048. HDFC Bank's ADR gained 0.8% to $71.83 on Wednesday.
The wholesale price index rose 6.73% in the 12 months to 3 February, higher than the previous week's annual increase of 6.58% due to an increase in food and manufactured product prices, data showed on Thursday. The annual inflation rate was 3.98% during the corresponding week of the previous year.
Asian markets were firm on Thursday. Key benchmark indices in Hong Kong, Japan, Singapore and South Korea were up by between 0.5% to 2.2%.
US stocks and bonds surged on Wednesday, with the Dow climbing to an intraday record, after Federal Reserve Chairman Ben Bernanke said the economy was growing and inflation pressures were starting to ease.
The Dow Jones industrial average rose 87.01 points, or 0.69%, to end at 12,741.86. The Standard & Poor's 500 Index gained 11.04 points, or 0.76%, to finish at 1,455.30. The Nasdaq Composite Index advanced 28.50 points, or 1.16%, to close at 2,488.38, off the session's high at 2,494.51.
Nymex crude was up slightly by 14 cents, at $58.14.
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