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IMF lifts mood on Dalal St: Sensex up 271 pts, metals shine


The News International Team

The market snapped three-day losing streak on Thursday, reacting to the Indian economy growth forecast by International Monetary Fund (IMF). The broader markets rallied too while metals, oil, select banks, IT and FMCG stocks led the key benchmarks higher.

The 30-share BSE Sensex rose 271.24 points or 0.95 percent to 28930.41 and the 50-share NSE Nifty climbed 76.05 points or 0.87 percent to 8776. The BSE Midcap and Smallcap indices gained 1.2 percent and 0.9 percent, respectively.

IMF on Wednesday raised its growth forecast for the current fiscal to 7.2 percent, even as it called for steps to revitalise the investment cycle and accelerate structural reforms in the country.

IMF also said India has emerged as one of the fastest-growing big emerging market economies and the growth rate would further accelerate to 7.5 percent in the next fiscal, 2015-16.

Meanwhile, US dollar Index hit the 100-mark while euro fell below USD 1.05 against dollar intraday for first time since January 2003.

Claudio Piron of Bank of America Merrill Lynch says dollar index will strengthen further and US companies earnings could be under stress as 40 percent of S&P 500 companies derive earnings from overseas. Most investors are bullish on Indian equities, he adds.

In the currency market, after three days of a dip, the rupee finally found some strength today to 62.5 a dollar, up 28 paise.

Insurance companies remained in the limelight today. Max India and Reliance Capital surged 5 percent and 11 percent, respectively on hopes that the Insurance Bill which seeks to raise FDI limit to 49 percent from 26 percent, is likely to be passed in the Rajya Sabha today.

Reliance Capital also reacted to the news that Japan-based Sumitomo MTB has completed acquisition of 2.77 percent stake in company. Reliance Capital received entire proceeds of Rs 371 crore for this stake.

Sun Pharma and Ranbaxy Labs climbed more than 2 percent as a media report indicated that the Sun has formed new leadership team of top executives, including Dilip Shanghvi’s son Aalok Shanghvi, to lead the businesses of both the organisations.

Among metals, Jindal Stainless shot up 11.4 percent after India’s trade ministry recommended anti-dumping duty on hot rolled flat products of stainless steel imports. Other steel companies rallied too on hopes that the anti-dumping duty may be extended to steel imports as well. Sesa Sterlite, Hindalco Industries and Tata Steel gained 2-3.6 percent.

ITC rose 2.35 percent as CNBC-TV18 learnt that the company has hiked cigarette prices by up to 20 percent. Sources see at least a 15 percent hike on an average. Fresh cigarette stock with price hike is yet to reach the market.

NTPC was up 3.5 percent as the company announced the ex-date of bonus debentures as March 23. Shareholders entitled to a bonus debenture of Rs 12.5 per share. The stock gained as traders played the arbitrage of going long on cash and short in the futures market.

Among others, Infosys, ICICI Bank, Tata Motors, Bharti Airtel and BHEL gained 1.5-2 percent. However, HDFC Bank, Dr Reddy’s Labs, M&M, HUL, Coal India and Bajaj Auto were under pressure, down 0.4-1.4 percent.

The market breadth was positive. About 1647 shares advanced and 1231 shares declined on the Bombay Stock Exchange.

Global cues were mixed today. Asian markets gained boosted by better-than-expected jobs data from Australia and an unexpected rate cut in South Korea. Shanghai rallied 1.8 percent and Nikkei rose 1.4 percent. In Europe, France’s CAC and Germany’s DAX were flat (at 16 hours IST) as investors pondered the implications of the ECB’s 1 trillion euro QE program. Britain’s FTSE climbed 0.8 percent.

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