Sensex Up 260 Points Despite Low GDP Numbers
Mumbai, Aug 30: The BSE Sensex shot up 260 points to 16,676.75 today, as investors ignored weak economic growth numbers and bought stocks at lower levels in line with strong trend in overseas markets as US consumer spending data ignited hopes of global economic recovery.
There was strong buying by foreign funds in metals, realty, banking and IT, even as the data released today showed that India's GDP growth slowed to 7.7 per cent in April-June quarter, from 8.8 per cent in the same quarter last fiscal. RIL and Infosys, with over 20 per cent weight on the Sensex, 3.64 per cent and 1.96 per cent respectively, pushing up the market.
The Bombay Stock Exchange 30-share index, Sensex, which gained 567.50 yesterday, rose 260.42 points or 1.59 per cent to 16,676.75. Intra-day, it touched a high of 16,714.70. Similarly, the broad-based National Stock Exchange index Nifty rose 81.40 points or 1.65 per cent to close above the 5k level at 5,001.
Analysts said that despite the government terming the GDP growth as “disappointing”, investors bought on strong cues from global markets.
They said investor confidence improved considerably after US consumer spending increased 0.8 per cent in July, the most since February. This pushed up major markets worldwide.
“Overnight positive closings in American markets lifted buying sentiment in Asian markets. US markets were buoyed by reports of largest increase in consumer spending in 5 months, which helped improve sentiment towards global recovery,” said Shanu Goes, Senior Research Analyst at Bonanza Portfolio. Brokers said short-coverings ahead of two holidays also led to the gains.
CNI Research CMD Kishor P Ostwal said, “Fall in GDP growth was in line with market expectations and does not impact negatively on the market.”
In Asia, key indices in Hong Kong, Japan, South Korea and Taiwan closed with gains of between 0.78 per cent and 1.71 per cent. China's market, however, closed in the red. In Europe, the trend was mixed in afternoon deals.
The CAC was down 0.4 per cent, the DAX by 0.48 per cent, while the FTSE was up 2.23 per cent. In US, the Dow and the Nasdaq had closed higher by 2.26 per cent and 3.32 per cent yesterday.
Overall, 24 of the 30 Sensex-based scrips finished in the green, while others closed in the red. DLF was the top gainer with a rise of 6.42 per cent, followed by Jindal Steel, Sun Pharma, Tata Steel, Hindalco, Jaiprakash Associates, HDFC Bank, Hero MotoCorp, HDFC, TCS, Infosys, SBI, Wipro, ICICI Bank, Sterlite Industries, Coal India, Tata Motors and Maruti, which settled up between 5.34 per cent and 1.14 per cent.
However, ONGC dipped 4.29 per cent after the company's board approved a draft prospectus for a follow-on public offer (FPO). ITC declined by 0.97 per cent.
Only BSE-FMCG, from the 13 sectoral indices, ended with small losses, while others concluded with gains of between 3.74 per cent and 0.13 per cent. Metals, Realty, Bankex and IT indices were at the forefront.
The total market breadth at BSE remained positive with 1,841 stocks gaining ground, as against 976 ending with losses. The total turnover shot up to Rs 2,616.94 crore from Rs 1,849.87 crore yesterday. PTI