Equities surge on rate cuts, Manmohan’s assurance (Roundup)November 3rd, 2008 - 7:08 pm ICT by IANS
Mumbai, Nov 3 (IANS) Indian equities finished in the green Monday following weekend measures by the central bank to reduce interest rates and boost liquidity and Prime Minister Manmohan Singh’s assurance to industry leaders that the government will take all necessary steps to protect the economy from the global financial turmoil.The markets opened strong with a key equity index more than 400 points higher than its previous close Friday and stayed in positive territory throughout the day indicating some return of investor confidence, analysts said.
The benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed at 10,337.68, up 549.62 points or 5.62 percent from its previous close Friday last week at 9,788.06 points.
The broader-based 50-share S&P CNX Nifty too finished in the green crossing the psychologically important 3,000 mark to close at 3057.15, up 171.55 points or 5.95 percent from its previous close Friday last week at 2885.60 points.
The BSE midcap index closed at 3,355.54, up 155.52 points or 4.86 percent from its previous close Friday last week at 3,200.02 points.
The BSE smallcap index finished at 3,927.10, up 161.99 points or 4.30 percent from its previous close at 3,765.11 points.
All sectoral indices ended in positive territory with realty, capital goods, bank and power stocks leading the surge.
Out of the stocks that make up the Sensex only two scrips ended with losses. Satyam Computers shed 1.54 percent while Infosys Technologies lost 0.23 percent. All other Sensex component stocks closed with gains.
The biggest gainers were Reliance Infrastructure, up 17.15 percent, DLF Ltd. up 14.89 percent, Jaiprakash Associates gained 13.36 percent and Ranbaxy Laboratories up 12.33 percent.
As many as 1,970 stocks or 74.28 percent advanced, 633 or 23.87 percent declined and 49 or 1.85 percent remained unchanged.
The fact that both midcap and smallcap indices were in the green indicated that there was some depth in the positive sentiments, analysts said.
The market mood was upbeat on account of the cuts announced by the Reserve Bank of India (RBI) Saturday in the repo rate, the statutory liquidity ratio and the cash reserve ratio.
The surprise step will not only lower the cost of borrowings for commercial banks and, in turn, reduce interest rates for households and the corporate sector alike, but also infuse additional liquidity worth Rs.400 billion into the system.
The upbeat mood continued following the Prime Minister’s positive outlook at his meeting with top industry leaders.
Overseas markets such as the New York Stock Exchange (NYSE) and the Nasdaq also closed with gains Friday last week with the NYSE index up 1.44 percent and the Nasdaq index up 1.32 percent.
The key Asian market Hong Kong Stock Exchange was also in the green Monday morning with the Hang Seng index up 2.69 percent mid-afternoon India time.
Only the Nikkei index of the Tokyo Stock Exchange was 5.01 percent in the red.
Although it was too early to predict a strong bullish trend, analysts said that the market is likely to continue recovering after the prolonged bear excesses of the past 10 months.
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Tags: bombay stock exchange, component stocks, global financial turmoil, investor confidence, manmohan singh, power stocks, prime minister manmohan, prime minister manmohan singh, ranbaxy laboratories, sectoral indices