Mumbai: Stock markets rallied today with a 360 points gain in the benchmark Sensex while shrugging off concerns regarding moderate GDP growth in the second quarter of 2007, and a marginal rise in inflation for the week ended 17 November.
Operators and retail investors stepped up their purchases after emergence of buying support from FIIs, which were mostly engaged in negative activity in November, market players said.
The market remained strong throughout except for a brief period during early trade when it touched the day’s low of 19,006.89.
The Bombay Stock Exchange 30-share Sensex ended 359.93 points or 1.89% up at 19,363.19 over yesterday’s close of 19,003.26.
The broader Nifty of the National Stock Exchange also surged by 128.15 points or 2.27% to close at 5,762.75 from previous close of 5,634.60.
The economic growth was low at 8.9% in July-September quarter compared 10.2% in the same quarter last year while inflation rate moved up to 3.21% for the week ended 17 November 2007 from 3.01% in the preceding week, data released today showed.
Meanwhile, finance minister P. Chidambaram has expressed confidence that economic growth will be close to 9.0% this fiscal and attributed the moderation in GDP growth in Q2 to slowdown in manufacturing.
Barring Shanghai Composite, which ended 2.63% lower, other Asian indices such as Hang Seng, Nikkei, Strait Times and Taiwan Weighted closed with impressive gains.
Shares consolidated gains to 1% during late morning trade, led by Reliance Industries, but traders said any move higher needed strong foreign inflows if it was to be sustained.
PSU banking major State Bank of India gained 2.3% to Rs2,322 after the Cabinet approved a rights issue worth Rs10,000 crore.
The market was underpinned by a rally in Asian stocks after comments by US Federal Reserve chairman Ben Bernanke reinforced expectations of further cuts in interest rates.
Data showing GDP growth in the July-September quarter grew marginally faster-than-expected also boosted sentiment, traders said.
At 11:30am, the benchmark BSE 30-share index was up 1.17%, or 221.51 points, at 19,224.77, with 27 of the 30 components gaining ground.
“The recent trend of the market losing momentum at higher levels may continue, because there is no fresh money coming into the market,” said D.D. Sharma, vice-president at Mumbai-based Anand Rathi Securities.
Foreigners have been net sellers of almost $1.3 billion of shares this month, a turnaround from buying of more than $7 billion between mid-September and end-October that drove the market to a series of record highs.
“If fresh money doesn’t come into the market, no matter how good the rally is, it will be very difficult to sustain any move on the higher side,” said Arun Kejriwal, strategist at research firm KRIS.
Largest listed real estate firm DLF Ltd was up 5.5% at Rs930, its highest level in more than a week.
Shares of property firms have been in focus after Maharashtra yesterday scrapped a law that controlled urban land holdings, potentially freeing up large tracts of prime real estate in the financial hub of Mumbai.
Tata Steel put on 2.1% to Rs818.90 after its managing director told Reuters the company would seek more joint ventures with Australian mining firms as it cannot supply enough of its own raw materials as its steel making capabilities soar.
In the broader market, 1,619 shares were trading higher, compared to 856 that lost ground.
The 50-share Nifty was up 1.69% at 5,730.
Early morning trade
The Bombay Stock Exchange benchmark Sensex maintained its upward march and gained 173 points in early trade on sustained buying by funds.
The 30-share Sensex, which gained 65 points yesterday, added another 173.06 points to touch 19,177.32 in the first five minutes of trade.
The 50-share Nifty of the National Stock Exchange also gained 70.85 to 5,705.45 points.
Trading sentiment was mainly boosted by reports of firm global trend.
State Bank of India opened up 3.5% at Rs2,350 after the Cabinet approved a rights issue worth Rs10,000 crore.