Sensex Up 1%, India to Grow at 9.2%

Ivaylo
07 Feb, 2001
New York City

The benchmark index rallied Wednesday on upbeat sentiment after the government released the official GDP growth of 9.2%. Aggressive buying in Bajaj Auto, Infosys and ICICI Bank led the market rise. The rally was not broad-based, though, as the market-breadth was negative. Tata Motors and ONGC led the decliners. The rupee hit a new high against the dollar.

[R]8:30AM NY-7:30PM Mumbai Sensex strikes all-time high, Bajaj Auto surges.[/R]
The Sensex on BSE finished 164.94 points, or 1.1%, higher at 14,643.13. The market-breadth was positive until mid-afternoon but then turned negative. For 1,337 shares that declined on BSE, 1,320 advanced and 51 shares were unchanged. Of the 30 stocks in the Sensex, 17 advanced, while the rest declined. The turnover on BSE was Rs 4,641 crore, lower than Rs 6,103 crore on Tuesday. On NSE, the turnover was Rs 10,333.92 crore, higher than Rs 9,840.6 crore on Tuesday.

Economic news

The government announced on Wednesday that it expected the economy to grow 9.2% in the fiscal year ending March 2007, topping the forecast of the Reserve Bank of India of 8.5% to 9%. The central statistics office also announced that manufacturing output growth was viewed at 11.3%, higher than 9.1% a year ago. The Indian government also said that it expects the economy of the country to experience its fastest growth in the upcoming 18 years.

The rupee hit a new high against the U.S. dollar on Wednesday, pacing gains in most Asian currencies. The dollar fetched 44.07/08 rupees.

Japanese carmaker Suzuki Motor Corporation has said it plans a further investment of 200 billion yen, or $1.66 billion in cars and two-wheelers in India.

Trading highlights

New listing Akruti Nirman was the most-active stock with a turnover of Rs 462 crore followed by Cambridge Tech and Shree Ashtavinayak.

Advancers

Bajaj Auto soared 9.21% to Rs 3,085.55. The company won product design infringement suit brought against Sri Lankan importer and Chinese manufacturer in the western region court of Sri Lanka. Insurance companies were also in focus. Aditya Birla Nuvo gained 9.6% to Rs 1,392 and Max India gained 5% to Rs 1,115, supported by a meeting of a group of ministers on amendments to the insurance bill that will raise the stake of foreign direct investments to 49% instead of 26% as it is currently.

IT large-cap Infosys also advanced 4% to Rs 2,360. Sensex index weight of Infosys free float factor will be raised to 0.85% from 0.8%, from February 12, 2007. Other large-cap advancers included Hindalco which surged 4.5% to Rs 182.10 and ICICI Bank which rose 2.6% to Rs 982 after the bank announced it had lifted the reference rate by 1% for corporate loans and home loans. The strong GDP report boosted select cement large-caps. Grasim gained 3% to Rs 2,877 and ACC rose 1.9% to Rs 1,064. Index heavy Reliance Industries rose 0.2% to Rs 1,392. Free float factor of the company has been reduced to 0.5% from 0.55%.

Decliners

Tata Motors led the decliners, down 2% to Rs 902.20 and ONGC also shed 1.8% to Rs 892. Hindustan Lever lost 0.8% to Rs 207.25. Ambuja Cement Ltd bucked the trend in cement stocks and fell 0.8% to Rs 141.45 and Tata Steel fell 0.6% to Rs 462.25.