Sensex surges 226 points, closes at 4-mth high

Mumbai: The Sensex today soared 226 points riding on the back of capital goods, FMCG, auto and banking shares to close at four-month high of 17,618.35 amid strong global cues after Eurozone finance ministers agreed on a deal to nurse the ailing Spanish banks back to health.

While the BSE benchmark index was under some pressure in early trade after Asian markets slumped on disappointing Chinese imports data, sentiments quickly changed after reports of EU leaders ratifying the Spanish deal started trickling in. Steps announced in Brussels, including conditions of a bailout package for Spain`s debt-ridden banks, drove stocks in the UK, France and Germany up 1 per cent each.

With 28 scrips of the 30-share index ending higher, the index closed with a gain of 226.37 points or 1.3 per cent. Today`s level is highest for Sensex after it closed at 17,675.85 on March 15. Similarly, the 50-share NSE Nifty rose 70.20 points, or 1.33 per cent to 5,345.35. "The news from Euro-zone was positive for equities. Bank clearly led the rise. Rupee also recovered sharply" said Milan Bavishi, Head Research, Inventure Growth and Securities.

Snapping a four-day losing string, the rupee was last trading at 55.50 a dollar compared to 55.92 on Monday. Brokers said auto stocks, including Maruti and Tata Motors, jumped after data showed car sales data in the country grew 8.28 per in June amid a tough market. Heavyweights ITC, Reliance and Infosys also inched up on hectic fund buying activity, traders said.

Expectations of good results from banks and financial sector also improved the market mood with HDFC Bank, ICICI bank and HDFC shares gaining in the 1-2 per cent range. "We expect financials to report healthy profit growth, largely driven by strong 25 per cent YoY rise for private sector banks," said Alpesh Mehta, analyst, Motilal Oswal. The overall market breadth was positive with 1,758 shares finishing with gains while 1,155 shares ended with losses.

A subdued trend in crude, which fell below USD 99 level, aided sentiments, experts said. Besides the Spanish deal development, better-than- expected UK manufacturing data supported gains in European stocks with key benchmark indices in France, Germany and UK trading higher in the 0.72-1.22 per cent range.

However, Asian stocks closed lower after macroeconomic data from China deepened fears of a global slowdown. Key benchmark indices in China, Hong Kong, Japan, South Korea, and Taiwan fell between 0.16 per cent to 0.80 per cent while Singapore`s Strait Times shot up by 1.21 per cent.

Trading in US index futures indicated that the Dow Jones Industrial Average could gain 39 points on opening today. Back home, major gainers from the Sensex pack were Hindalco (2.74 pc), Maruti Suzuki (2.72 pc), ITC (2.71 pc), Tata Motors (2.58 pc), Sterlite Industries (2.46 pc), Jindal Steel (2.41 pc), L&T (2.08 pc), HDFC Bank (1.86 pc), Hero MotoCorp (1.72 pc) and Gail India (1.52 pc). Bharti Airtel (1.50 pc), Cipla (1.46 pc), ICICI Bank (1.37 pc) and Reliance Industries (1.02 pc) also clocked gains. However, Wipro that lost 0.36 per cent and NTPC that was marginally down were the only losers in the 30-share index.

Among the BSE sectoral indices, the BSE-Capital Goods rose by 1.75 per cent, followed by the BSE-FMCG (1.75 pc), the BSE-Auto (1.62 pc), the BSE-Bankex (1.54 pc), the BSE-Metal (1.48 pc), the BSE-Realty (1.46 pc). The BSE-Power and the BSE-Consumer Durables also rose over one per cent each. The total turnover firmed up to Rs 2,004.12 crore from Rs 1,818.07 crore on Monday.