Biggest rally in Sensex in more than three months

Nifty rallies above 2900 led by RIL, HDFC

Bears were caught off guard as Indian equity benchmarks rallied Monday mirroring Asian and European markets. Banks, oil&gas and

metal stocks were in the limelight while realty space ended with modest gains.

What started as a firm opening turned into a rally as traders frantically covered their positions. Volumes were also high as funds continued to churn portfolio ahead of March F&O series expiry and end of financial year 2008-09.

“A lot of short covering also seems to have driven the market as those who must have gone short at 2800 levels must have covered shorts. We could see the Nifty rallying upto 3000-3050 in a session or two. However, any rise above that looks unlikely because of forthcoming elections,” said Ambarish Baliga, vice-president, Karvy Stock
Broking

Bombay Stock Exchange’s Sensex ended at 9,424.02, higher by 457.34 points or 5.10 per cent from Friday’s close. The index extended gains to a high of 9454.69 after opening at 9040.30.

National Stock Exchange’s Nifty closed at 2939.90, up 132.85 points or 4.73 per cent. The broader index hit a high of 2949.75 and low of 2807.25.

The BSE Midcap Index ended 2.73 per cent higher and BSE Smallcap Index gained 2.01 per cent. Amongst the sectoral indices, BSE Bankex was up 6.66 per cent, BSE Oil&gas Index climbed 6.4per cent and BSE Metal Index moved up 6.31 per cent. BSE Realty Index ended with modest gains.

Ranbaxy Laboratories (10.8%), Tata Steel (10.39%), Hindalco Industries
(9.35%), HDFC (8.44%) and Reliance Industries (7.56%) spearheaded the rally on the Sensex.

The gains in Ranbaxy can be attributed to the company receiving good manufacturing practice certificate from UK and Australian health regulators for its Paonta Sahib facility in Himachal Pradesh. The MHRA approval will not only cover product filings for the UK but will also apply to product filings for the entire European Union.

Shares of Tata Motors closed over 3 per cent higher ahead of the launch of small car, Nano. While revolutionizing the Indian car market with its breakthrough budget pricing, the mad rush for the Nano is likely to result in a windfall for cash-starved Tata Motors that is likely to adopt a direct sale model for the car with a unique distribution plan.

Reliance Infrastructure closed 10 per cent higher after Anil Dhirubhai Ambani Group-owned Delhi Airport Metro Express, a special-purpose vehicle floated by Reliance Infrastructure for building the airport metro express line connecting the heart of the capital with the international airport, managed to raise Rs 2,500 crore funding for the project.

DLF, down 2.16 per cent, was the lone laggard in the 30-share index. Market breadth across BSE was extremely positive with 1,629 advances against 899 declines.

European markets were following the global trend led by gains in banking stocks. FTSE 100 was up 1.61 per cent, CAC 40 was up 1.42 per cent and DAX moved 1.84 per cent higher. Wall Street is all set to surge Monday ahead of U.S. Treasury Department’s plan to buy toxic assets from banks. Talks of stimulus package by Japan is also likely to keep the market mood upbeat.