Sensex surpasses 18,000...Nifty conquers 5500 Sensex surpasses 18,000...Nifty conquers 5500

The Indian market continued its upsurge in the new year on Wednesday with a magnificent rally. The BSE Sensex eased past 18,000 in early trade while the NSE Nifty surged past 5500 for the first time since August 1, 2011. For yet another day, we saw buying on dips which propelled the benchmark indices to day's high towards the close of trade. A gap-up opening in today’s trading session confirmed the resumption of a fresh uptrend with immediate resistance on the Nifty seen at ~5580.

After opening 44 points higher, the Nifty climbed further up amid sustained strength in rate sensitive sectors such as Realty, Capital Goods, Banking and Auto. If it wasn't for the weakness in index bellwether RIL, the gains for the day could have been much fatter.



Finally, the BSE Sensex ended at 18,202, up 354 points from the last close. It earlier touched a day's high of 18,231 and day's low of 18,000.

The Nifty settled at 5,531, up 116 points. It hit a day’s high of 5,542 and day’s low of 5,461.

The INDIA VIX on the NSE was down ~2.7% to close at 22.10. The index hit day's high of 22.71 and hit day’s low of 21.71.

Among the BSE sectoral indices, the BSE Realty index was the top gainer, up by a whopping 5%. The BSE Capital Goods index and BSE Power index rose 4% and 3.5% respectively. On the other hand, only BSE Oil & Gas index slipped 0.3%.

The BSE Mid-Cap index and the BSE Small-Cap index rose ~2.1% and 1.3% respectively.

Among the 30 constituents of the Sensex, Tata Motors, DLF, Tata Power, L&T, BHEL and Sterlite Industries were among the major leaders. On the other hand, RIL, Cipla and Hindustan Unilever ended in the negative terrain.

The market breadth was upbeat as buying took place across sectors. On the BSE, 1894 stocks advanced against 1083 declining stocks, while 102 stocks ended unchanged.

Tata Motors was the clear start performer after posting stronger-than-expected Q3 FY12 results yesterday.

Shares of private sector power companies climbed in a rising market after the Prime Minister's Office (PMO) announced that Prime Minister Dr. Manmohan Singh had directed Coal India Ltd. to expedite coal supply to private sector power producers.

The PMO wrote on Tweeter that the Prime Minister's initiative would help power plants with estimated capacity of more than 50,000 MW.

Shares of Tata Power, Reliance Power, Indiabulls Power, Adani Power, Torrent Power, Jaiprakash Power and GVK Power surged post the PMO announcement on Twitter.

Rpower shot up 13%, Indiabulls Power hit 20% upper circuit before ending higher by 19%. JP Power rose by over 5.5%. Coal India added 1.7% post the announcement.

Separately, the EGoM, headed by Finance Minister Pranab Mukherjee, decided to go ahead with the disinvestment of ONGC but put off the stake sale in BHEL to next fiscal. Even the timing and pricing of ONGC disinvestment, which will be done through the auction route, have been deferred to the next EGoM meet.

Shares of ONGC and BHEL pared intraday gains after the announcement.

The rally in equities this year has come on the back of robust dollar inflows let loose by easy monetary policy in the developed world and liquidity-boosting measures by the ECB.

FIIs have invested US$7.75bn in Indian debt and equity so far in 2012, according to data from Securities and Exchange Board of India. The foreign funds have bought Indian shares worth ~US$4.2bn year-to-date after withdrawing ~US$500mn last year.

"As far as India is concerned, the good news is that inflation has cooled off in January, giving elbow room to the RBI to ease its hawkish monetary policy further and support growth. But, overall world equity markets are showing some signs of fatigue this month after a surprisingly strong January. Corporate results have been mixed in the backdrop of a slowing economy.

Concerns about the eurozone remain at the forefront after Moody’s downgraded six European nations and warned the UK on its ‘AAA’ grade. Greece continues to stumble in its attempts to secure more international aid before next month’s scheduled repayment.

Therefore, one must remain a bit cautious and wait for more signs of strength in the markets,".

Sentiment across Asian markets was lifted by media reports that Greek political leaders will give a written undertaking on new budget cuts to international lenders on Wednesday to clinch new aid and avoid default next month. The leaders of Greece’s two biggest political parties will provide written commitments to budget cuts, a government official in Athens was quoted as saying.

Also, the Chinese central bank governor Zhou Xiaochuan said that China would play a bigger role in solving Europe's problems. Beijing will continue to invest in euro zone government debt, said the head of People's Bank of China.

The European markets were also trading with a positive bias, driven by the positive remarks of Zhou and encouraging earnings from companies like BNP Paribas, Heineken and Peugeot.