The Government’s decision to double gas prices inspired bulls to buy stocks across the spectrum as a result the BSE index Sensex spurted 520 points on Friday, its biggest gain in 22 months, with energy firms RIl and ONGC leading the surge. FIIs were seen buying stocks after a flurry of reforms in the energy space. Overall, 1535 stocks gained out of 2512 traded, helping investor wealth soar by Rs 1.52 lakh crore today.
Sensex resumed up and stayed in the positive zone throughout to end at 3-week high of 19,395.81, a spurt of 519.86 points. Previously, it had gained 567.50 points on August 29, 2011. Similarly Nifty flared up by 159.85 points to end at two-week high of 5,842.20. Also, SX40 index, the flagship index of MCX-SX, ended 275.16 points higher at 11,494.35. Tracking stocks, rupee rebounded to 59-levels after touching historic low of 60.76 earlier this week.
Government had on Thursday approved near doubling of natural gas prices to $8.4 from April 1 next year and okayed setting up of a coal regulator. last week, it allowed power producers to pass through higher imported coal prices.
Oil and gas counters were in limelight today with BPCl, IOC, GAIl, Petronet lNG, RIl, HPCl and ONGC gaining in 2.2-5.7 per cent range. Metal, capital goods, PSU, banking, auto, realty and pharma stocks attracted good buying support. Power stocks like Tata Power and NTPC too were in demand.
“Today’s move was on the back of the government reforms initiative of increasing gas prices and setting up of a coal regulator,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
Asian markets cheered reports with uptp 2.2 per cent rise as reports said Fed officials are of the view that asset purchases would be more aggressive if US growth signals prove to be weaker-than-expected. QE withdrawal concerns had hit Indian markets with nearly $7 billion flowing out of stocks and bonds in past one month. Key indices in Hong Kong, Taiwan, Singapore, Chinaand South Korea were up by 1.04 per cent to 2.26 per cent. In Japan, Nikkei 225 index jumped 3.51 per cent as a weak Yen and upbeat industrial-production data lifted market sentiment.
“The (possibility of )tapering of QE by Fed, liquidity problem among Chinese banks and the rapid international capital flows have all caused turbulence in the global financial market,” Credit Suisse said in a report.
European stock markets were, however, trading narrowly mixed. Key indices in Germany and UK moved up by 0.08 per cent to 0.18 per cent while France’s CAC eased by 0.16 per cent.
Rsup 80 paise
In tune with surge in stocks, the rupee on Friday rose by a staggering 80 paise, its biggest single- day gain in last nine months, to close above the 60-mark at 59.39 amid signs of strong fund inflows on hopes that US Fed will not begin tapering monetary stimulus soon.
Forex dealers said sustained dollar selling by exporters tracking weakness in the US currency overseas also boosted the rupee.
The rupee commenced at 59.95 a dollar as against previous close of 60.19 at the Interbank Foreign Exchange (Forex) market and immediately touched a low of 60.02.
later, it rebounded sharply and rallied to a high of 59.21 before settling at 59.39, revealing a rise of 80 paise, or 1.33 per cent.
Gold futures extend losses, slip below Rs25k on global cues
Extending early losses, gold prices dipped below the Rs25,000 level by falling Rs434 to Rs24,941 per 10 grams in futures trading today as speculators engaged in reducing their positions, tracking a weak global trend.
At the Multi Commodity Exchange, gold for delivery in August fell by Rs434, or 1.71 per cent, to Rs24,941 per 10 grams in business turnover of 37,478 lots.
In a similar fashion, the yellow metal for delivery in October declined by Rs439, or 1.72 per cent, to Rs25,063 per 10 grams in 1,236 lots.
Market analysts said the fall in gold prices at futures trade was attributed to offloading of positions by participants after it dipped below $1200 mark in the global market as improving US economic data strengthened the case for the Federal Reserve to reduce stimulus, mainly put pressure on the precious metal prices.
Besides, a weak trend at the spot market too weighed on the prices, they said.
Gold prices tumbled to a 23-month low by falling Rs 1,150 to Rs 25,650 per 10 grams in the national market.
Globally, gold fell 0.60 per cent, to $1,191.79 an ounce after touching a year low of $1,180.71 in Singapore on Friday.