India’s Sensex gains 482 points on rate cut hopes (Roundup)December 4th, 2008 - 6:10 pm ICT by IANS
Mumbai, Dec 4 (IANS) Indian equities markets shook off some initial hesitation Thursday morning and surged rest of the day on expectations of rate cuts with a key index finishing more than 482 points higher to once again breach the psychologically important 9,000 mark.“The surge is probably in expectation of at least 100 basis point cuts in both the repo and reverse repo rates and other stimulus package measures to be announced coming Saturday,” said Jagannadham Thunuguntla, head of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
The repo and reverse repo rates refer to the interest rates charged for lending and borrowing by the central bank, the Reserve Bank of India, to and from other commercial banks respectively.
The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) finished at 9,229.75, up 482.32 points or 5.51 percent from its previous close Wednesday at 8,747.43 points.
The Sensex opened some 32 points higher at 8,779.02 points and except for a few minutes of staying in the red to hit an intra-day low of 8,726.71 points continued to move up into positive territory to hit an intra-day high of 9,245.06 before sliding a bit to its closing value.
The broader-based 50-share S&P CNX Nifty of the National Stock Exchange (NSE), also showed a similar trend and closed at 2788.00, up 131.55 points or 4.95 percent from its previous close Wednesday at 2656.45 points.
The BSE midcap index closed at 2,922.80, up 92.21 points or 3.26 percent from its previous close Wednesday at 2,830.59 points.
The BSE smallcap index ended at 3,331.80, up 66.70 points or 2.04 percent from its previous close at 3,265.10 points.
Overnight US markets closed in the green with a key index of the New York Stock Exchange finishing 1.82 percent higher. The Nasdaq index closed 2.94 percent higher than its previous close Tuesday.
Asian markets, however, ended marginally in the red with the Nikkei, key index of the Tokyo Stock Exchange finishing with a loss of 1.0 percent and the Hang Seng, key index of the Hong Kong Stock Exchange ending with a loss of o.58 percent.
All 13 sectoral indices ended with gains with realty, metal, capital goods and oil and gas stocks being the major gainers.
All 30 stocks that make up the Sensex ended with gains with Tata Steel, up 13.84 percent, gaining the most, followed by Jaiprakash Associates, up 13.77 percent, Tata Motors, up 13.29 percent and DLF Ltd., up 11.28 percent.
As many as 1,503 stocks or 67.37 percent advanced, 668 stocks or 29.94 percent declined and 60 stocks or 2.69 percent remained unchanged.
As markets were already scraping the bottom, some bounce back was expected, analysts said.
“Today’s surge is likely to be temporary as even the stimulus package will take a very long time to start having any impact so the overall situation remains negative,” Thunuguntla said.