CRR hike fails to dampen market spirit

Positive global cues, enthusing quarterly numbers and a strong bullish sentiment helped the market scale up in the early hours of trades. Buying was witnessed in select banking and FMCG stocks, while auto, information technology and pharma stocks remained out of favour. The market turned choppy after the announcement from Reserve Bank of India to hike the cash reserve ratio (CRR) by 50 basis points to 7%. The Sensex slipped immediately into the red and touched the day's low of 15,225. But it was quick to recover on the back of gains in capital goods, metal and FMCG stocks. All around buying saw the Sensex touch the day's high of 15,569. The Sensex finally closed the session at 15,551, up 290 points. The broad based Nifty ended the session at 4,529, up 89 points.

The breadth of the market was positive. Of the 2,717 stocks traded on the BSE 1,706 stocks advanced, 937 stocks declined and 74 stocks ended unchanged. Among the sectoral indices the BSE CG index flared up by 4.90% and the BSE Realty index gained 2.40%. While the other sectoral indices were up around 1% each, the BSE IT index and the BSE Auto index ended with moderate gains.

The recovery in the market was led by L&T, which shot up by 7.29% at Rs2,624. Among the major gainers HDFC advanced by 5.72% at Rs2,018, BHEL moved up by 5.48% at Rs1,734, Ranbaxy added 3.64% at Rs390, SBI scaled up by 3.60% at Rs1,636 and Reliance Communication jumped 3.57% at Rs560. Select index stocks witnessed selling pressure. M&M was the major loser and dropped 2.86% at Rs731. HUL fell by 1.32% at Rs206, Tata Motors declined by 1.16% at Rs699, Infosys and Dr Reddy's Lab closed with the moderate losses at Rs1,973 and Rs635 respectively.

Capital Goods stocks witnessed sharp buying support. Greaves Cotton jumped 8.75% at Rs364. Crompton Greaves vaulted by 7.23% at Rs293, ABB advanced 6.96% at Rs1,147, Kirloskar Brothers flared up by 6.83% at Rs445 and Punj Lloyds gained 5.20% at Rs283. Alstom Projects, Lakshmi Machine Works, Bharat Electrical were up 3-4% each.

Over 1.31 crore RNRL shares changed hands on the BSE followed by IFCI (83.97 lakh shares), Bella Steels (65.12 lakh shares), IKF Technologies (60.90 lakh shares) and Harig Cranks (59.36 lakh shares).

SBI was the most actively traded counter on the BSE and registered a turnover of Rs277 crore followed by L&T (Rs168 crore), Reliance Industries (Rs138 crore), Reliance Energy (Rs125 crore) and Housing Development & Infrastructure (Rs120 crore).