Mumbai: Finance Minister P Chidambaram's meeting on Tuesday with the heads of PSU banks made Dalal Street happy. The benchmark indices witnessed buying interest in last one hour of trade, after trading choppy since morning.
Global cues also turned positive for our markets in late trade. Bank and realty stocks led this rally followed by power, capital goods, FMCG and metal stocks.
The 50-share NSE Nifty crossed the 3,100 level and went up higher by 108.45 points to touch an intraday high of 3152.30.
The 30-share BSE Sensex jumped over the 10,500 mark and hit an intraday high of 10,668.48, with a gain of 330.8 points.
The Sensex surged 293.44 points or 2.84%, to close at 10,631.12 and the Nifty settled at 3142.10, up 3.23% or 98.25 points over the previous close. BSE Midcap Index rose 90.68 points or 2.7% to 3,446.22 and Small Cap index was up by 108.01 points or 2.75% at 4,035.11.
In the derivative space, Nifty Futures continued to see long build up. It oscillated between 10 to 30 point premiums and ended at 32.90 points premium.
Real Estate stocks were up with significant open interest build up. Fresh short build up was seen in IT stocks. Banking and Capital goods stocks continued to see log build up. Aggressive Put writing was seen in 2800 strike price.
Among the frontliners, DLF, Ranbaxy Labs, Jaiprakash Associates, Tata Power, Reliance Communication, ITC, ONGC, Suzlon Energy, Unitech, Reliance Power, Siemens and SAIL shot up 7-21%.
Finance Minister P Chidambaram said that liquidity has to be monitored on a continuous basis.
The RBI is committed to provide adequate liquidity as required, he added. FM had discussed agricultural credit, SME credit, liquidity enhancing measures, credit growth, capital adequacy with bankers. He also said that we was satisfied that action had been taken by RBI and banks.
He further said that adequate finance will be provided to housing & SME sector. Finance Minister is going to consider Rs 10,000 crore credit line to NHB. RBI will provide enough dollar liquidity to banks. FM aims to have CAR of 12% for all PSU banks.
Major PSU banks see interest rates softening after opening of liquidity tap by RBI last week. SA Bhatt, Chairman of Indian Overseas Bank said that rates on advances will be cut by 75 bps, and that of deposits by 50 bps. There is no pressure to cut rates by Finance Minister. Rate cuts won’t affect the margins much due to CRR cuts, he added.
SBI Chairman OP Bhatt said that he see interest rates softening. There is a consensus that lending & deposit rates can be cut. SBI may cut the lending rates by 25-50 bps. He said that SBI may cut the PLR by up to 50 bps in 1-2 days. However, the bank will decide on deposit rate cut in a couple of weeks.
Bank of Baroda said that it may cut the lending rates by 75 bps on Wednesday. Central Bank of India is going to cut lending rates up to 100 bps this week.
The BSE Bankex jumped 353.65 points or 6.56% to 5,741.04. Bank of Baroda, Kotak Mahindra, Bank of India and Union Bank rose 9-15.5%. IOB, Yes Bank, Oriental Bank, IDBI Bank, PNB, ICICI Bank, SBI, Axis Bank, Canara Bank and Andhra Bank surged 6-8%. HDFC Bank was up 3.73%.
Realty index surged 260.16 points or 12.14%, to settle at 2,402.44. DLF and Unitech jumped over 14.5%. Ansal Properties, Indiabulls Real and Omaxe rose 12-13.7%.
Power stocks charged up. Suzlon Energy shot up 20.57%. Reliance Power, CESC, GMR Infra and Tata Power were up 8-12.8%. Power Index was up by 95.39 points or 5.66%, to close at 1,781.38.
FMCG stocks like ITC, United Breweries, Dabur India, HUL and Godrej Consumer jumped 3-7.6%. BSE FMCG Index ended with a gain of 89.29 points or 4.77% at 1,961.19.
Capital Goods Index moved up by 350.35 points or 4.61% at 7,942.57. Siemens, Crompton Greaves, BHEL, Punj Lloyd, Bharat Electronics and L&T rose 3.44-11.8%.
Metal Index closed at 5,854.67, up 232.30 points or 4.13% over previous close. JSW Steel, SAIL, Jindal Saw, NALCO and Tata Steel were up 6.5-11%.
Buying was also seen in Oil & Gas stocks. Index rose 202.39 points or 3.09% to 6,749.51. ONGC shot up 7.12% and Reliance Industries rose 1.6%. Oil marketing companies like BPCL, IOC and HPCL surged 1.43-6.86%. Crude was hovering around USD 62-64 to a barrel on the NYMEX.
The BSE Auto Index was up 45.74 points or 1.67% to 2,791.56. Bharat Forge, M&M, Maruti Suzuki, Ashok Leyland, Hero Honda and Tata Motors were up 1.6-4.7%.
Healthcare Index went up higher by 21.34 points or 0.75% to 2,879.38. Biocon, Matrix Lab and Ranbaxy Labs rose 10-13.4%. Dishman Pharma and Cipla jumped over 4.5%. However, Sun Pharma Advanced and Sun Pharma lost 6% and 4.7%, respectively, as as US FDA issued warning letter to Detroit-based Caraco Pharma (subsidiary of Sun Pharma). USFDA had noted inefficiencies in quality control unit of Caraco.
Among the midcap stocks, Shree Renuka, Lakshmi Machine, Rajesh Exports, IVRCL Infrastructure and Praj Industries were up 14-18%.
In the small cap space, Hinduja Venture, Asian Electronics, Sujana Towers, Emkay Global and Tube Investment rose 18-20%.
However, technology stocks were under pressure. IT Index plunged 124.41 points or 4.33% to 2,749.95. Satyam, TCS, Wipro, Tech Mahindra, HCL Tech and Infosys fell 3.32-7.4%. The Indian Rupee has appreciated to 47.9 to a dollar versus previous close of 48.64/$.
Total traded turnover in today's session stood at Rs 49,570.10 crore. This includes Rs 11,391.32 crore from NSE Cash segment, Rs 33,758.52 crore from NSE F&O and the balance Rs 4,420.26 crore from BSE Cash segment.
Market breadth was positive; about 1979 shares have advanced while 994 shares have declined. Nearly 218 shares remained unchanged.
On the global front, European markets were trading higher. FTSE was up 1.01%. CAC and DAX were up over 1.5% each, at 3:51 hrs IST.
The Dow Jones Futures gained 149 points at 9,481 and the Nasdaq Futures went up 29 points to 1,370, at 3:51 hrs IST.
Asian markets ended mixed. Nikkei jumped 6.27% (it was shut on Monday). Kospi and Jakarta rose 2.15% and 1.26%, respectively. Hang Seng was up just 0.28%.
However, Straits Times fell 2.87%. Shanghai lost 0.76% and Taiwan fell just 0.05%.
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