The market surged for the third day in a row today, even as the key indices struck record highs for the second successive day. The Sensex hit 14,500, while the Nifty 4,200 for the first time. Telecom shares extended gains, as auto shares rose on renewed buying. Metal shares, however, retreated.
The rally on the domestic bourses materialised amid a mixed trend in Asian and European shares.
The Sensex’s provisional closing was 14,510.16, a gain of 106.39 points. It also struck a lifetime high of 14,526.51, surpassing its earlier all-time high of 14,462.77 from Friday (2 February 2007).
The provisional closing of Nifty was 4,215.75, a gain of 32.25 points.
The market-breadth was strong. For 1,529 shares rising on BSE, 1,135 declined. As many as 60 shares were unchanged. Gainers outpaced losers by a ratio of 1.34:1.
The BSE clocked a turnover of Rs 4691 crore.
Auto shares rose on renewed buying. Car major Maruti Udyog rose 2% to Rs 965 while Tata Motors 1% to Rs 920. Bajaj Auto rose 1.7% to Rs 2827 and Horo Honda gained 1.2% to Rs 724.90. There are hopes that auto industry may get tax sops in the budget. Expectations are that the excise duty on small cars may be cut further from 16% to 8%. Last week, top automakers reported good vehicle sales numbers for January 2007.
Reliance Communications surged 5% to Rs 515.75. The scrip hit a lifetime high of Rs 518.40. As many as 33.2 lakh shares changed hands in the counter on BSE. Bharti Airtel was up 1% to Rs 779.40, off an all-time high of Rs 797, struck earlier during the day.
Mobile service majors continued in Friday's buoyant vein. The Telecom Regulatory Authority of India (TRAI) decided to lower port charges, allowing cellular operators to connect to BSNL and MTNL lines by up to 29%, a move which is expected to result in tariff cuts. A race for India's fourth-largest mobile firm, Hutchison Essar, is also expected to boost the valuation of telecom stocks. Suitors for Hutch also include Britain's Vodafone.
Housing finance major HDFC gained 4% to Rs 1818, extending Friday’s surge. The stock also hit an all-time high of Rs 1821.95. The company continues to benefit from a strong demand for housing loans.
Reliance Energy rose 2.8% to Rs 549.50, amid reports that the company will bid for the global power assets of a British power investment company, Globeleq, by mid-February.
Tata Steel gained 1.7% to Rs 471.05. The stock plunged last week after winning Anglo-Dutch steel maker, Corus Group, in an auction held in London. The Tatas will pay $12.1 billion for Europe's leading steel producer. The price is said to be expensive and may put under strain Tata Steel's finances, at least in the short term.
Index heavyweight Reliance Industries (RIL) 1.3% to Rs 1390. Last month, the company reported robust Q3 December 2006 results.
State Bank of India (SBI) was up 1.2% to Rs 1196, after the bank's chief said domestic interest rates have peaked for the fiscal year ending March 2007.
Metal shares lost, responding to a fall in base metal prices on the London Metal Exchange (LME) on Friday. Hindustan Zinc lost 5.7% to Rs 653.50, Sterlite Industries shed 6.6% to Rs 485.50 and Hindalco lost nearly 3% to Rs 177.80. Fund-liquidation, triggered by a report of heavy losses at a hedge fund, had caused the fall of metal prices on LME.
European markets were little changed in early trade. London’s FTSE 100 index was up 0.07%. Asian markets were mixed. Japan’s Nikkei 225 average was down 1.1% as Japanese automakers tumbled after Nissan Motor slashed its earnings forecast. Hong Kong’s Hang Seng was down 0.5%. Key benchmark indices in South Korea, Singapore and Taiwan were up between 0.08 - 0.34%.
US blue-chips eased on Friday after data showed a moderate job creation in January, suggesting that the Federal Reserve will not cut interest rates yet, while the S&P 500 and the Nasdaq had edged higher. The Dow Jones industrial average fell 20.19 points, or 0.16%, to 12,653.49, while the Standard & Poor's 500 Index rose 2.45 points, or 0.17%, to 1,448.39. The Nasdaq Composite Index gained 7.50 points, or 0.30%, to 2,475.88.
Finance Minister P Chidambaram said earlier on Monday that last week's upgrade to investment grade of the country's credit rating by Standard & Poor's will lead to increased foreign investment. "Thanks to the upgrading of our ratings to investment grade, I am confident more investments will come to India," the finance minister told a conference. Last Tuesday, S&P raised India's rating, citing the country's strong economic prospects and external balance sheet.
Prime Minister Manmohan Singh said on Saturday that inflation reduction, which spiked over 6% last week, remains a top priority for his government.