With rebound in crude oil prices as well as strong numbers in fourth quarter corporate results along with expectations of further economic reforms in the third year of the Modi Government, market sprinted for the third straight session as the Sensex on Thursday gained over 485 points to 26,367 - nearly a 7-month high on Dalal Street. Meanwhile, beating street estimates shares of larsen & Toubro (l&T) also zoomed over 14 per cent after the company reported an 18.55 per cent increase in consolidated net profit for the March quarter.
Tracking the sharp rally in the stock, the company’s market valuation jumped by Rs 16,941 crore to Rs 1,37,222 crore. The l&T stock was the biggest gainer on the Sensex and Nifty during the day. On the volume front, 16.90 lakh shares of the company changed hands on the BSE and over 1 crore shares were traded on the NSE during the day. “l&T reported consolidated PAT ahead of our/street estimates,” Prabhudas lilladher said in a note.
Improvement in March quarter numbers on the last leg of the earnings season showed that the economy is gaining traction, which buoyed sentiment further. Oil broke past the $50 per barrel for the first time this year after data showed US crude inventory declined, which kept Asian markets too in good spirits.
Traders said covering-up of short positions on expiry of May month series of derivative contracts at the end of session helped. An appreciating rupee against the US dollar provided more ammo to investors. After a strong performance by the BJP in recently-held Assam assembly elections, expectations have grown that the growing political comfort for the ruling party would help expedite various economic reforms by the Modi Government in its third year.
In spite of all this, worry lines remained, given uncertainties over US tightening its monetary policy earlier than expected and a slowing Chinese growth.
The Sensex opened strong and surged further before settling at 26,366.68, a solid gain of 485.51 points, or 1.88 per cent. The barometer ended at 26,552.92 on November 4 last year. The index had gained 650.85 points in the previous two sessions on strong reform measures from the Centre and firm global cues.
The 50-share NSE Nifty ended at 8,069.65, a hefty gain of 134.75 points, or 1.70 per cent. Globally, Asian markets ended higher following an overnight surge on the Wall Street and a higher opening in Europe after crude oil topped $50 a barrel. The G7 summit in Japan to take stock of the global economy also infused a sense of confidence, according to market experts.
As many as 22 scrips out of 30-share Sensex pack ended higher. l&T emerged as the top gainer by rising 14 per cent after the company reported an 18.5 per cent jump in consolidated net profit at Rs 2,453.6 crore for the March quarter. Other major gainers were SBI (4.91 per cent), BHEl (4.73 per cent), Axis bank (3.35 per cent) and ONGC (3.09 per cent). Capital goods rose 8.78 per cent, followed by banking 2.22 per cent, realty 1.82 per cent and power 1.51 per cent. However, mid-cap and small-cap too rose 1 per cent and 0.86 per cent, respectively, on increased buying by retail investors.
Key indices in France, Germany and the UK were higher by up to 0.28 per cent. Shares in China, Hong Kong, Japan and Singapore finished higher by up to 0.26 per cent. Meanwhile, foreign portfolio investors (FPIs) net bought shares worth Rs 495.08 crore during Wednesday’s trading session, as per provisional data. The market breadth remained positive as 1,411 shares ended higher, 1,141 closed lower while 195 ruled steady.