Post Market Commentary

After a day’s pause, bulls were back in action on Tuesday sparked by a global rally on expectations of an interest rate cut at US Federal Reserve’s crucial meet later today.

Key indices ended at all-time highs spurred by significant gains in frontline shares. Second line shares also participated. Sectorwise, realty and banking stocks charged ahead. But consumer durables and information technology shares finished marginally lower.

“The market was volatile for the last few sessions. But the undertone was always bullish. It was waiting for heavyweights to participate to spark a rally. And today, Reliance Industries provided fuel for the index move, which automatically spurred other frontline shares,” said technical analyst, Sachin Chavan.

The 50-stock Nifty ended at an all-time high of 6097.25, up 136.05 points or 2.29 per cent from its previous close. Intra-day, the index made a new high of 6,111.20.

The 30-share Sensex closed 360.21 points or 1.8 per cent higher at 20,290.89, making a fresh peak of 20,333.06 earlier today. Year ago, on Dec 11, 2006, the 30-share index was at 13,399.43, a gain of 6,891.46 points or 51.43 per cent. Total market capitalization for the Sensex was Rs 6,780,443.62 crore. Of the 30 shares, 25 advanced and 5 declined.

BSE Midcap Index and Smallcap Index gained 1.19 per cent and 0.76 per cent respectively.

Stocks that made a new high included Bihar Sponge at Rs 45.40, State Bank of India Rs 2,475.25, First Leasing Rs 80.65, GTC Industries Rs 750, Kotak Mahindra Bank Rs 1,334.80, LIC Housing Finance Rs 402.90, Rain Commodities Rs 279, Remi Metals Rs 30.5, ICI India Rs 642.90.

The top traded scrips by volume were Ispat Industries, Ashok Leyland, Reliance Petroleum, Mangalore Refinery & Petrochem, MTNL, Arvind Mills, Apollo Tyres, Alok Industries, Lanco Infra, IDFC.

Realty shares chalked up smart gains with Ansal Infrastructure catapulting 17.51 per cent, Unitech up 8.48 per cent, Omaxe adding 6.95 per cent and HDIL climbing 5.68 per cent.

Banking shares also attracted investor interest. Indian Overseas Bank added 4.93 per cent, HDFC Bank rose 4.81 per cent, Canara Bank climbed 3.94 per cent and Union Bank advanced 3.37 per cent.

Among frontliners, Bharti Airtel (up 6.21%), HDFC Bank (4.8%), ONGC (3.68%), Hindalco (3.34%), ICICI Bank (3.32%), Maruti Suzuki (3.64%) and Reliance Industries (1.99%) boosted the Sensex while DLF (down 1.20%), Infosys Technologies (0.31%), BHEL (0.27%) and Ambuja Cements (0.27%) disappointed.

Market breadth on BSE saw 1981 gainers and 894 losers.

Overnight, US stocks gained after investors in Singapore and the Middle East agreed to inject $11.5 billion into UBS AG and on increased expectations of Federal Reserve interest-rate cut. Shares of rate- sensitive companies like banks, mortgage lenders and home builders were the frontrunners in the rally.

Dow Jones industrial average was up 101.45 points or 0.74 per cent to end at 13,727.03. Standard & Poor's 500 Index was up 11.30 points or 0.75 per cent at 1,515.96. Nasdaq Composite Index was up 12.79 points or 0.47 per cent at 2,718.95.

On Asian shores, Japan’s Nikkei average ended 0.76 per cent up at 16,044.72, South Korea’s Kospi settled at 1,925, up 0.98 per cent, Singapore Strait Times advanced 1.01 per cent to close at 3,589.

However, European markets were lagging behind. UK’ FTSE 100 was down 0.54 per cent at 6,529, Germany’s DAX was at 8,024, down 0.12 per cent and France’s CAC 40 was down 0.39 per cent at 5,728.

The market move on Wednesday will be largely guided by US Federal Reserve’s move on interest rates later today. A quarter point rate cut, after 0.75 percentage point of reductions in September and October, would mark the greatest easing of borrowing costs since 2001.

Orient-Express Hotels owns or part-owns and manages 50 luxury hotels, restaurants, tourist trains and river cruise properties in 25 countries, including New York's 21 Club.