Sensex Surges 6%

123jump.com Staff
25 Mar, 2008
New York City

Stock in Mumbai trading surged after a rally in Asia stocks lifted market averages across the region. Hong Kong and India led the region with a sharp rebound of more than 6%. Realty, banks and technology stocks led the gainers in Mumbai trading. Sensex gained 6.1% or 928.09. At close, the BSE 30 share closed at 16,217.49. Nifty gained 5.1% or 267.65 to close at 4,877.50 levels.

[R]10:00AM New York, 7:30PM Mumbai - Sensex gained as banking, technology and realty shares led the gainers.[/R]

Market Sentiment

Stocks in Mumbai rallied on Tuesday on intense buying in large cap stocks with the benchmark index Sensex gaining 6.1% or 928.09. At close, the BSE 30-share closed at 16,217.49, the second largest one-day rally.

In the broader markets the National Stock Exchange index Nifty gained 5.1% or 267.65. The 50-share closed at 4,877.50 levels.

In the last two weeks, the markets stocks have been under pressure as international investors pulled back and worries related to lack of progress in the credit markets in the U.S. Weak domestic industrial production data for January and a rise in inflation contributed to the weakness.

Retail investors and brokers are also worried that an increase in short-term capital gains tax in the next fiscal year also hurt the sentiment.

Banking, IT and realty stocks led the gainers. Reliance Industries, Larsen & Toubro, Jaiprakash Associates, Reliance Energy, Infosys Technologies and Housing Development Finance Corporation were among the gainers in the index.

Among the shares traded on the BSE, 2,075 stocks advanced, 640 declined and 47 stocks remained unchanged.

Turnover

Daily turnover on the BSE stood at 6,836 crore rupees and of the NSE was at 14,182 crore rupees.

Axis Bank led the most active stocks on the BSE with a trading volume 603.16 crore rupees followed by Reliance Capital, Housing Development Finance Corporation and Essar Oil.

Economic News

The UPA-alliance government proposal to increase wages of central government staff could prove to be inflationary. The election year maneuver only will add to the current budgetary woes of India. The wage hike is expected to add $3.1 billion cost to the central government budget in the fiscal 2009 and could add as much as $4.5 billion if the increase is retroactive to January 2006.

India receives the largest remittances in 2007

The latest report from the World Bank estimated that India, China, and Mexico led the remittances from workers in the foreign countries. India led the world with a receipt of $27 billion, followed by $25.7 billion to China and $25 billion to Mexico.

The hard earned money from workers in the Middle East, the U.S.A, and Canada, and European nations are helping many developing countries to sustain their local economies and provide solid foreign exchange reserves to these nations.

Millions of workers from India are working in UAE, Saudi Arabia, and other Middle Eastern nations. Recently wages in these nations have not kept up with the rising cost of living and a large majority of these workers are living in wretched living conditions. UAE and Saudi governments have reacted to recent protest by threatening deportations.

Many poor people from India, Bangladesh, and Pakistan are stuck with divided families and poor living conditions.

According to the Immigrants and Remittances Overview 2008 report, U.S. led the exporting nations with remittances of $42.2 billion followed by $15.6 billion from Saudi Arabia and $13.8 billion from Switzerland.

Gainers

Larsen & Toubro rose 3.9% to 3,053 rupees and Jaiprakash Associates rose 16.4% at 233.10 rupees. DLF surged 13.5% at 678.65 rupees and Housing Development Finance Corporation rose 8.6% at 2,589.75 rupees.

State Bank of India rose 5.8% to 1,740.20 rupees.

ICICI Bank soared 9.4% to 879.95 rupees on news reports that the bank has entered into a 1,150 crore rupees stock plus debt deal with Jaypee Infratech, a unit of Jaiprakash Associates.

According to news reports, the bank has decided to invest 1% stake in Jaypee Infratech for 250 crore rupees.

TCS gained 6.4% to 875.95 rupees, Satyam Computer surged 5.1% to 411.05 rupees and Infosys Technologies rose 9.6% at 1,492.55 rupees

Reliance Update

Reliance Industries rose 5.2% to 2314.40 rupees on news reports that the firm is evaluating a plan to set up its third refinery at Jamnagar in an ambitious project to reach a total of annual capacity of 100 million metric ton.

Reliance Energy was up 13% at 1,300.15 rupees.