Mumbai, May 18
The bulls returned to the Bombay Stock Exchange (BSE) on Tuesday enthused by reports that Congress Party president Sonia Gandhi may turn down the post of India’s next Prime Minister.
As stock brokers celebrated by hooting and whistling at today’s rally wiping off some of the losses caused by Monday’s historic plunge recovering, the Reserve Bank of India (RBI) added some pep by presenting rosier forecasts about the country’s economy.
Investors and financial institutions, which had some inclination about the coming announcement by the RBI, bought furiously hoping to make up for past losses.
According to the RBI, India’s economic growth would be around 6.5 to 7 per cent during the current financial year while inflation would be maintained at five per cent, a slight fall from the previous year. The markets seem to have discounted the interest rates continuing at the prevailing 6 per cent rate, according to analysts.
Investors also welcomed the new policy, which seeks to boost the capital market by reducing the margin money that banks have to keep for financing shares, public offers and underwriting guarantees to 40 per cent from 50.
The Sensex opened 48 points higher on Tuesday and as news trickled in about the possibility of former finance minister Manmohan Singh taking over as Prime Minister, the 30-scrip bellwether index shot up 394 points to rule at 4,898.96 points. It subsequently closed at 4,877 points, a gain of 372 points from the previous close.
The Nifty finished above the 1,500-mark, adding 115 points to end at 1,504. Among today’s gainers include Reliance up 7.45 per cent to Rs 434. ITC zoomed 10.82 per cent to close at Rs 918. HLL gained 8.40 per cent to close at Rs 130.
The positive sentiment even rubbed off on PSU stocks. SBI was up 9.81 per cent to Rs 491; MTNL up 13.51 per cent to Rs 121 and BHEL scaled up 9.89 per cent to Rs 438. Even HPCL ended with a modest gain of Rs 4 at Rs 319 and ONGC was marginally up by 1.51 per cent at Rs 639.
Among tech stocks, Infosys gained 7.95 per cent to Rs 4,887 while Wipro zoomed up 22.33 per cent to Rs 1,544 and Satyam was up 5 per cent at Rs 308.
Among pharma stocks, Dr. Reddy’s shot up 12.70 per cent to Rs 888 and Cipla gained 10.35 per cent to Rs 239 and Ranbaxy was up 3.97 per cent at Rs 1,008.
