Wednesday, March 2, 2011

In the post-budget rally, the Bombay Stock Exchange 30-share benchmark Sensex, zoomed 623.10 points and closed at 18446.50 on Tuesday, its biggest single day jump since May, 2009, against 17823.40 on Monday. The broad-based National Stock Exchange 50-share index, Nifty shot up by 189.05 points to 5522.30 from 5333.25.
The rally was led by automobile, bank, realty and capital goods stocks and all sectoral indices recorded handsome gains. The automobile sector index gained 5.64 per cent to 8718.22, followed by banking index by 4.35 per cent to 12355.22. The realty sector shot up by 4.20 per cent to 2064.81 and the capital goods index by 4.19 per cent to 12918.87.
“Budget announcement was the major trigger for the market and it brought in huge short covering. It was centred on investment in infrastructure, agriculture, education and financial sector which was cheered by the marketmen on Tuesday,” said Alex Mathews, Research head, Geojit BNP Paribas Financial Services.
Oil prices have eased a bit but regional uprising seen in Oman which supplies around one per cent of global oil is a concern. But assurance from Saudi Arabia to make good any supply disruption may keep the price cool at least for some time.
During the day, the market has taken note of the trade data which showed exports in January rising an annual 32.4 per cent to $20.6 billion while imports rose 13.1 per cent to $28.6 billion. Even though Wednesday being a holiday for markets on account of Mahashivratri, investors remained invested showing their confidence.
Automobile companies rallied on better February sales report which was out during the day showing decent numbers which further supported the uptrend in the sector. Power sector shares were in demand as tax exemption under Sec. 80-1A for power generation companies was extended by one more year for one more year and also exemption was given for ultra mega power plants from excise duty in the Union Budget. Education stocks remained attractive as before.
In the global arena also the trend was positive with the Asian markets rising on falling oil prices and rising U.S. personal income. Buying was so strong that all 13 sectoral indices ended up, gaining 1.71 per cent to 5.64 per cent with auto, banking, realty, capital goods and metal stocks leading the gains. The total market breadth was highly positive as 2,128 stocks ended with gains while 759 finished with losses on the BSE.
Meanwhile, BSE and NSE will remain closed on Wednesday on account of Mahashivratri.

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