Monday, December 8, 2008

Government Stimulus Package Boosted Sensex Above 9k Mark - Dec 08, 2008

Market sustained gain on the back of fiscal stimulus package by the government and rate cut by the central bank. Further, the firm global stocks supported the domestic bourses. In addition to this, the government is likely to pump additional spending over the next four months of the current fiscal ended March 2009 to bring back the confidence of the investors into the market.

On the sectoral front, traders on-loaded positions across the sectors. Banking Stocks rallied after the RBI’s announcement of rate cuts. Repo rate cut by 100 basis points to 6.5% from 7.5% and reverse repo rate by 100 basis points to 5% from 6% effective from December 8, 2008. Whereas, Cash reserve ratio (CRR) is kept unchanged at 5.5%. Further, it also announced steps to improve liquidity and shore up economic activity. In addition to this, RBI also promised to set aside Rs.4,000 crore of credit to National Housing Bank (NHB) to lend to housing finance companies. Besides this, the public sector banks are expected to announce a package for borrowers of home loans up to Rs.20 Lakh.

Metal and iron ore exports stocks advanced on government abolition of export duty on iron ore fines. The government abolished 8% exports duty on export of fines and also reduced the current 15% ad valorem export duty on lumps to 5%. The move comes as a major relief for the producers, since 86% of iron ore export consists of fines.

Meanwhile, infrastructure stocks rallied after the government announced a stimulus plan to enhance the sector. Moreover, the government hopes to provide rapid support to infrastructure projects worth Rs.100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company.

The Market breadth, indicating the overall strength of the market, was strong. On BSE, out of 2,279 stocks traded so far, 1,458 shares advanced while 746 shares declined. Nearly 75 shares are unchanged.

At 1.30PM, the BSE Sensex is trading higher by 413.68 points at 9,378.89 and NSE Nifty is up by 126.79 points at 2,841.20.

The BSE Mid Cap is trading higher by 30.76 points at 2,923.72 and Small cap is trading up by 44.44 points at 3,367.98.

Gainers from the BSE Sensex Pack are Reliance Infra higher by (6.81%) at Rs.568.70 along with DLF Ltd by (6.72%) at Rs.216.80, Tata Power by (6.67%) at Rs.713.50, Tata Steel by (6.48%) at Rs.194.65, Housing Development Finance Co by (6.45%) at Rs.1,529.00, HDFC Bank by (5.92%) at Rs.941.50, RCom by (5.65) at Rs.208.40 and Jaiprakash Associates by (5.28%) at Rs.69.85 among others.

The BSE Realty index is higher by 101.20 points or (5.98%) at 1,793.39. Stocks trading higher are Unitech Ltd up by (8.12%) at Rs.33.30 along with Housing Dev by (7.03%) at Rs.94.35, DLF by (6.72%) at Rs.216.80, Ansal Infra by (6.33%) at Rs.27.70, Indiabulls Realty by (5.74%) at Rs.27.70 and Orbitco by (5.43%) at Rs.50.50.

The BSE Metal index is higher by 202.24 points or (4.36%) at 4841.97. Stocks trading lower are NMDC Ltd up by (7.09%) at Rs.140.50, Tata Steel by (6.48%) at Rs.194.65, JSW Steel by (5.63%) at Rs.225.00 and Steel Authority of India by (5.51%) at Rs.69.95.

The BSE Bankex index is higher by 196.03 points or (4.16%) at 4,903.48. Stocks trading up are HDFC Bank by (6.04%) at Rs.942.55 along with ICICI Bank by (5.73%) at Rs.379.00, Yes Bank by (5.59%) at Rs.69.00 and Axis Bank by (4.32%) at Rs.462.25.

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