Metals lift Sensex by 571 points

The Sensex ended above 10,500 levels at 10,536, tracking gains in global equities markets after China unveiled a $586 billion stimulus plan over the weekend. Metal stocks on the BSE benefitted the most from today’s rally.

The broader stock indicator Nifty also surged 175 points to 3148 levels.

On Sunday, China unveiled a massive 4 trillion yuan ($586 billion) stimulus package in hopes of keeping economic growth from falling too fast. Demand from the U.S. and the country's other vital export markets has been waning as the global financial crisis takes an economic toll.

“Today’s surge at the Indian markets was a relief rally and more technical correction might be seen at 3200-3250 levels,” said R Swaminathan, National Head of Mutual Fund, IDBI Capital.

Heavy buying was seen across the board on the BSE with metal, capital goods and oil & gas stocks leading the gains. The metal index on the BSE galloped 10.9 per cent on hopes of revival in demand after China announced a huge financial stimulus to shore up economy.

NMDC was the biggest gainer in the metal pack. It spiked nearly 18 per cent after the company successfully negotiated a 102 per cent hike in export prices of iron ore from Japanese and South Korean steel mills, notwithstanding the global financial downturn.

Jindal Steel & Power, Sterlite Industries and Hindustan Zinc also surged more than 13.4 per cent each. “Some restoration of confidence has happened in the markets. Metal stocks had seen a sharp erosion in prices in the past and they bounced back today on account of short covering,” said Ashu Madan, National Head, Religare Securities.

The capital goods and oil & gas index on the BSE also jumped more than 6 per cent each.

Among the Sensex stocks, Sterlite Industries zoomed 13.4 per cent and was the biggest gainer in the group. Other major gainers were Tata Steel, Reliance Infrastructure and Hindalco.

Sterlite, Tata Steel and Nalco led the gainers in the Nifty scrips.

The BSE smallcap index gained 2.3 per cent while BSE midcap index ended 3.6 per cent higher.

“The markets may test the lows in the next 4-5 months. Investors would buy on impulse or price value basis but hedge funds, FIIs or private equity groups will come to India in next 3-6 months,” said Dr. Alok Aggarwal, Chairman, Evalueserve.

Asian stock markets gained strongly on Monday, with Shanghai's index spiking more than 7 percent, as investors welcomed China's $586 billion stimulus plan aimed at countering the effects of a global slowdown on its economy. European markets opened higher.

Tokyo's Nikkei 225 stock average surged 498.43 points, or 5.8 percent, to 9,081.43, buoyed also by a weakening yen. Hong Kong's Hang Seng Index gained 501.20 points, or 3.5 percent, to 14,744.63, though traded well off its highs.

In mainland China, where the benchmark Shanghai Composite Index has fallen by more than two-thirds since peaking last October, the index soared 7.3 percent to 1,874.80. Markets in Australia, Singapore and South Korea joined the region's advance.

Source: ndtvprofit