Easing food prices drive Sensex above 19,000

Easing food prices drive Sensex above 19,000

Mumbai: Easing food prices and positive cues from the global markets helped Indian stocks snap a two-day fall. After opening on a positive note, Indian stocks gained momentum after data released by the government pointed to easing food inflation in the domestic economy. In the year to 25 June, India’s food price index eased to seven week low of 7.61%. While the index stood at 7.78% the previous week, falling food prices sparked hopes that inflationary pressures might have turned the corner.

Positive global cues also strengthened the sentiment in the domestic market. Stock markets in Europe advanced for eighth time in nine days on expectations of an improvement in American job market.

Sensex: 19,078 +1.88%

Nifty: 5,728 +1.84%

FTSE 100: 6,029 +0.44%

Bharti Airtel, ITC and commodity stocks led the gains in the Nifty. The rebound in international commodity markets led to buying in metal stocks like Hindalco, Jindal Steel and Reliance Industries.

Index heavyweight Reliance Industries gained 2.23% on reports that the government might approve the company’s proposed stake sale in hydrocarbon blocks to BP Plc. Except Sterlite Industries, all stocks in the Nifty 50 closed the day with gains.

Bharti Airtel: 397 +3.73%

ITC: 203 +3.53%

Hindalco: 195 +3.38%

Jindal Steel: 657 +2.81%

Reliance Industries: 871 +2.23%

At the sectoral level, FMCG, real estate and capital goods stocks led the gains on the BSE. Expectations that Indian companies will tide over the slump in earnings growth led to broad-based buying in equities.

BSE FMCG: 4,086 +2.60%

BSE Realty: 2,183 +2.25%

BSE Capital Goods: 14,058 +2.20%

FMCG stocks extended their gains as easing raw material prices and a benign demand environment are forecast to help FMCG companies report strong earnings in the June quarter.

Marico: 161 +6.91%

United Spirits: 1,104 +4.75%

Hindustan Unilever: 335 +1.79%

Dabur India: 113 +1.25%

Stocks of FM radio companies surged after the government approved the proposal to raise foreign direct investment in this sector to 26% from 20%. Private FM radio companies have also been allowed to own more than one channel in a particular city.

Reliance Broadcast Network: 86 +7.09%

Entertainment Network India: 280 +6.31%