Post Session- Robust FII buying, global cues drive Sensex past 18,000 Analysis for Feb 15, 2012

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Heavy FII buying saw the Sensex soar above the 18,000 mark as a global stock market rally boosted sentiment across domestic bourses. The Realty and the Capital Goods space led the rally.

BSE SENSEX closed at 18202.41 up by 353.84 points or by 1.98 % and then NSE Nifty ended at 5531.95 up by 115.9 points or by 2.14 %. The BSE MIDCAP closed at 6480.68 up by 133.46 points or by 2.1 %, while the BSE SMLCAP ended at 7053.01 up by 92.35 points or by 1.33 %. The BSE Sensex touched intraday high of 18231.35 and intraday low of 18000.3 The NSE Nifty touched intraday high of 5542.1 and intraday low of 5460.6.

The positive closing of most of the US markets on Tuesday lifted domestic sentiment during morning trade. On Tuesday, the Dow Jones Industrial gained 4.24 points and closed at 12,878.28 and the closed at 2,931.83, gaining 0.44 points over the previous day's closing. The domestic benchmarks surged at the start, tracking a strong rally on Asian markets. Asian markets jumped to a six-month high on Wednesday after Chine pledged support to Europe in solving the deepening debt turmoil. Chinese policymakers vowed that they will invest in European bailout funds and continue to expand holdings of European sovereign debt, boosting sentiment and increase the appetite for risky assets. Investors also hoped that Greek political parties would provide written assurances to EU policymakers to seek the 130 billion euro second bailout fund. Moreover, the decision of the Bank of Japan to inject more monetary stimulus was also cheered by the markets. On the domestic front, foreign investors continued to pour money into the stock market as easing inflation boosted the scope of a rate cut. The benchmarks continued their upward march during afternoon trade. After paring some gains, a rally on European stocks saw the domestic benchmarks regain momentum and surge to the day's high in the final hour of the session. Finally, the benchmarks ended the day on a bullish note, with the Sensex and the Nifty gaining over 1.95% each. Among the BSE Sectoral indices, BSE Realty and BSE Capital Goods ended up 5.01% and 4.01% respectively.

Among the 30 Sensex stocks, Tata Motors, DLF, Tata Power Company, L&T and BHEL gained 6.91%, 6.05%, 6%, 5.06% and 4.53% respectively. Among the Sensex stocks, there were 27 advances and 3 declines. On BSE out of total shares traded 3141, shares advanced were 1928 while 1106 shares declined and 107 were unchanged.

On the Economic front, India is set to allow mergers and acquisition in the telecom sector, resulting in a combined market share of up to 35 per cent, the government said on Wednesday.

On the Global front, the 17-member Eurozone economy shrank for the first time in two and a half years in the fourth quarter of 2011 as the deepening debt turmoil and severe austerity measures squeezed demand, said a report by Eurostat on Wednesday. Gross Domestic Product (GDP) contracted by 0.3 per cent in the October-December 2011 period, over the previous quarter.

On the Asian front, Shanghai Composite ended up 0.94%, Hang Seng closed up 2.14% and Nikkei 225 ended up 2.3% on Wednesday.

On the European front, CAC 40 was up 1.05%, DAX was up 1.11% and FTSE 100 was up 0.25% on Wednesday.

On the Corporate front, Tata Motors global vehicle sales were up 21 per cent in January 2012, year on year, boosting the stock, which ended up 6.91% at Rs 286.40 on the BSE on Wednesday.

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