Bounce back Monday; Sensex zooms 568 points

Technology shares were under buyers’ radar, which provided the major support today alongwith rally in the global stocks. The Sensex surged 568 pts and the Nifty rose 172 pts.

Major headlines

RBI issues guidelines for new bank licences

Govt may raise export duty on iron ore

RIL regains top position

RBI proposes new rules for NBFCs



Indian indices

It was a stunning Monday as the Indian markets remained buoyant all throughout the day. Investors picked up stocks that were beaten the most in recent days, ie technology companies. Healthy global equities after the US Federal Reserve indicated that the US economy was poised to grow in the second half of 2011 also lifted investor mood. Continuous buying activity across the board pushed the markets higher. Out of the 30 Sensex stocks, 28 were in the positive zone. Major heavyweight gainers - TCS, L&T, RIL, Tata Steel, Infosys, HDFC, Bajaj Auto, Jaiprakash Associates led the markets to post solid gains. The third biggest rally of 2011 took place on the first day of the week after three sessions’ of losses.

Investors also cheered as the ongoing political impasse came into an end after government gave in to the demands of anti corruption activist

Sensex movements: Strong global cues led the Sensex to start 232 points higher at 16081 and hit the day’s low of 16069 on the onset of session. Then the index continued its upward journey and remained healthy all throughout the day. In last half hour of trade, strong buying in technology, metal, realty and banking shares led the index to hit the day’s high of 16462. The Sensex rose 568 points to settle at 16416 and the Nifty stood at 4920, up by 172 points.

Market sentiment

The market breadth stood very strong, with 2121 shares gaining, 716 shares declining and 103 shares traded unchanged.

Viewing volumes

India's second largest real estate developer - Unitech was traded the most, with over 0.87 crore shares changing hands on the BSE. Following that an industrial finance company - IFCI (0.54 crore shares), a major Indian telecommunication company - Reliance Communications (0.35 crore shares), wind tu rbine major - Suzlon Energy (0.26 crore shares) and a Jaypee Group firm - Jaiprakash Associates (0.23 crore shares).

Sectoral & stock screening

Investor confidence in the markets was seen today as all the sectoral indices closed with strong gains. Top performers - BSE Information Technology (IT) up by 5.06%, BSE Metal rose by 4.63%, BSE Realty surged by 4.43%, BSE TECk up by 4.15%, BSE Bankex up by 4.10% and BSE Capital Goods (CG) rose by 4.05%. Rest of the sectors gained in the range of 0.93-3.02%.

Biggest 'A' group gainers - Bajaj Finserv advanced by 14.42%, IFCI rose by 11.25% and Reliance Capital rose by 9.72%. Top 'A' group losers - SKS Microfinance lost by 4.18%, Marico fell by 2.46% and Apollo Hospitals Enterprise declined by 1.78%.

Global signals

The European shares were trading with gains on Monday, following the rally in Wall Street on Friday (August 26, 2011), after US Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the troubled economy at the US central bank's September meeting. The UK's FTSE 100 index was closed today.

All the Asian indices closed higher on Monday after Ben Bernanke’s speech. However, Shanghai Composite index was the only loser, down by 1.37%. The Jakarta Composite index was closed today.

The US stock index futures signal to a higher opening on the Wall Street on Monday.

Market Outlook: US Personal Income, Consumer Sp ending and P ending Home Sales Index will be out on Monday.