FM statement lifts Sensex 293 points higher

Led by banking and realty stocks, the markets ended sharply higher at 10,631 after the Finance Minister assured of more liquidity measures and said that PSU banks have agreed to cut rates.

The markets opened marginally lower today and throughout the day the key indices were choppy, slipping in and out of the red turf. The markets rallied in the last one-hour of the trade after the statement from the P. Chidambaram, who met PSU bankers today. Addressing the media after the meet, he said the PSU banks have agreed to cut deposit rates by 50 bps and also reduce their lending rates by 75 bps. He also said that the government would take steps to boost the dollar liquidity.

Broader stock indicator Nifty also surged 28 points to end at 3142 levels.

“The statement by finance minister brought a very positive sentiment in the market. Such measures strengthen the medium- to long-term growth momentum of India,” said Upendra Kulkarni, director & CEO of Fortress Financial Services.

The realty index on the BSE surged 12.1 per cent. The Finance Minister said steps would be taken to meet the funding needs of housing sector. DLF and Unitech were the top gainers in the group, both up more than 14.5 per cent.

Banking index on the BSE gained 6.6 per cent with Bank of Baroda, Kotak Mahindra Bank and Bank of India leading the gains.

The other sectoral indices that ended with major gains were capital goods, metals and FMCG. “The Nifty has strong resistance at 3180-3200 levels. If these levels are crossed only then the upsurge would continue. Else the bounce back may get punctured,” said Bharat Dalal, Fund Manager, Dawnay Day AV Financial Services.

Among the Sensex stocks, realty major DLF led the gainers, up nearly 14.7 per cent. Ranbaxy, Tata Power, and JP Associates were the other major gainers, gaining more than 8 per cent each.

Suzlon Energy led the gainers on the Nifty. It rose nearly 21 per cent after the company announced it would acquire Martifer's stake in RE Power SystemsAG by next month. The acquistion was earlier scheduled to take place in May 2009.

DLF, Unitech and Reliance Power were the other prominent gainers on the Nifty.

Telecom stocks gained today after news reports said that there would be no delay in the plan to complete the 3G spectrum auction by mid-January. RCom, Tata Tele gained over 7 per cent each.

Asian stock markets were mixed in cautious trade after Wall Street’s relatively flat finish ahead of the US presidential election.

Japan's market jumped after being closed for a holiday. Hong Kong's Hang Seng Index edged up 0.2 per cent and South Korea's Kospi rose 1.2 per cent, while benchmarks in Singapore and Shanghai fell more than 1 per cent.

Source: ndtvprofit