Market rallies; Sensex ends up 3.32%

Indian equities wrapped the day on a cheerful note. Realty, metal, auto, banking and capital goods led the rally. Broader markets also boosted the sentiment. It opened on a firm note with a gain of 187.80 points, at 15,207.96 on Thursday on strong global cues. The index gained further ground cheered by US Fed announcement, better than expected IIP data and tax reform plans. The other factors like inflation and positive opening of European market added fuel to the sentiment.

Secondline stocks also performed well. BSE Midcap and Smallcap index surged 3.59% and 4.11% respectively.

The government proposed to bring down corporate tax to 25%, and abolish Securities Transaction Tax (STT).

Meanwhile, India`s benchmark wholesale price index (WPI), annual inflation continued to trade in negative zone, standing at -1.74% for the week ended Aug 1, 2009 as compared -1.58% a week ago.

On sectoral front, BSE Realty for the third straight session ended higher. The counter soared 6.86%, Metal surged 5.57%, Auto, Capital goods, Bankex advanced over 4%, FMCG rose 3.94%, PSU, Power gained 1%.

European stocks rose as the German and French economies unexpectedly grew and the Federal Reserve said a recovery is under way while pledging to keep interest rates near a record low. Standard & Poor`s 500 Index futures added 0.5% today, while the MSCI Asia Pacific Index increased 1.5%. UK`s benchmark index FTSE 100 rose 50.40 points, or 1.07%, to trade at 4,767.14. French benchmark index CAC 40 advanced 35.43 points, or 1.01%, to trade at 3,542.65. Germany`s benchmark index DAX climbed 72.51 points, or 1.36% to trade at 5,422.01. (4.15 p.m., IST)

Asian stocks rose after the US Federal Reserve said the recession is easing and resolved to keep interest rates low. Japanese benchmark index Nikkei rose 82.19 points, or 0.79%, to end at 10,517.19. Hong Kong`s Hang Seng index climbed 426.06 points, or 2.08%, to close at 20,861.30. China`s Shanghai Composite gained 27.84 points, or 0.89% to settle at 3,140.56.

The Sensex ended the day with a gain of 498.33 points, or 3.32% at 15,518.49 after touching a high of 15,545.13 and a low of 15,207.96. The broad-based NSE Nifty climbed 147.50 points, or 3.31% at 4,605.00 after hitting a high of 4,614.15 and a low of 4,458.55.

All shares in the Sensex settled with a positive note. Major gainers were DLF (7.21%), ICICI Bank (6.53%), Maruti Suzuki India (6.41%), Tata Steel (6.04%), Tata Motors (5.86%), and Sterlite Industries (India) (5.81%).

Overall market breadth was sharply positive. Out of the total 2,794 stocks traded at BSE, 2,215 advanced, 517 declined while 62 remained unchanged.

Saurav Arora, senior vice president, Jaypee Capital Services commenting on the market outlook said, ``Markets worldwide at new 52 week highs. Today`s evening data would further direction to the market. Market has tested 4,720/50 levels two times in last two months and would take some time to break the same.`