Mumbai, December 23: The BSE Sensex rose 3.23 percent on Wednesday to its highest close since mid-October, with Reliance Industries and banks leading the gains on favourable long-term prospects and relief that monetary policy has not been tightened.
Finance Minister Pranab Mukherjee said sustaining high growth was a priority, and said Asia’s third-largest economy could grow 7.75 percent in the fiscal year ending in March.
“If there is an India story, there is definitely a case for banks to grow,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.
Leading bank State Bank of India rose 2 percent and ICICI Bank climbed 4.3 percent, helped by easing concerns about an imminent tightening of monetary policy.
“The negatives which we were expecting in terms of liquidity tightening did not happen as yet, and may not happen in near future. This helped our market,” said Nilesh Doshi, president of equities at Techno Shares.
The 30-share BSE Index climbed 539.11 points to 17,231.11, its highest close since the special Diwali session on Oct. 17 when the market had ended at its highest since mid-May 2008.
All 30 shares rose as the index logged its biggest daily gain in seven weeks.
The benchmark is up 79 percent so far this year, and is on track to post its best yearly gain since 1991.
Energy giant Reliance Industries rose 4.6 percent to 1,065.90 rupees. The company had said on Tuesday it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin off the country’s east coast.
“Reliance has underperformed in recent times. It was just waiting for a trigger to catch up with the broader market. And, the gas find news pushed it higher,” said Rawal.
The stock is up 5.4 percent since the end of June while the main index has risen 18.9 percent.
Metals stocks extended Tuesday’s gains on a strong demand outlook for metals in 2010.
“There is growing perception that there is likely be an increase in demand for metals globally, which is why we have seen strong buying interest in metals stocks,” said Rawal.
Aluminium maker Hindalco closed 7.8 percent higher at 153.20 rupees. Steel maker Tata Steel finished 4.45 percent higher at 603.30 rupees.
Copper producer Sterlite Industries climbed more than 5 percent to 847.20 rupees.
Export-focused software services companies also gained on hopes of an improving global outlook, with Infosys Technologies and Tata Consultancy Services touching all-time highs at 2,590 rupees and 747 rupees respectively.
Infosys and Tata Consultancy closed 3.3 and 2.8 percent higher respectively.
In the broader market, gainers were double the number of losers on a volume of 435 million shares, around one-third higher than recent daily volumes.
The 50-share NSE index was closed 3.18 percent higher at 5,144.60, its second-highest close since May 2008.
STOCKS THAT MOVED
* State-run power producers such as NTPC and NHPC jumped rose 7 and 6 percent respectively on media reports the government may consider letting state-run companies sell part of their unallocated generation capacity.
* Jindal Saw rose 1.9 percent to 186.40 rupees. The pipe maker said on Tuesday it won orders worth more than 11 billion rupees to supply steel and iron pipes.
MAIN TOP 3 BY VOLUME
* Suzlon Energy on 16.3 million shares
* NHPC on 12.7 million shares
* Unitech on 8.9 million shares
—Agencies