Post Session -Firm global cues lift Sensex Analysis for Feb 21, 2012

The key domestic benchmarks notched up significant gains today as the Sensex soared to a seven month high amid firm global cues. The Realty and Consumer Durable space led the rally.

BSE SENSEX closed at 18428.61 up by 139.26 points or by 0.76 % and then NSE Nifty ended at 5607.15 up by 42.85 points or by 0.77 %. The BSE MIDCAP closed at 6604.34 up by 59.78 points or by 0.91 %, while the BSE SMLCAP ended at 7202.12 up by 85.63 points or by 1.2 %. The BSE Sensex touched intraday high of 18470.86 and intraday low of 18293.8 The NSE Nifty touched intraday high of 5621.5 and intraday low of 5561.75.

Soon after witnessing a gap up opening, the domestic benchmarks surged higher amid robust cues from the Asian markets. Asian markets were trading higher on Tuesday as Greece and the European Union reached a deal on the 130 billion euro bailout aid, easing concerns over the deepening debt contagion in Europe and boosting the demand for high-yielding risky assets. The deal will see Greece receive new funding of 130 billion euro, which will cut down Greece's debt to 121 per cent of the nation's GDP by 2020, the European Union said. The deal means that the debt stricken Greek economy will be able to serve its debt obligations of 14.5 billion euro due this March and avoid a default. Easing monetary policy conditions in China raised optimism that growth may pick up in Asia's largest economy. China on Saturday cut the reserve requirements for the nation's banks by 50 basis points to boost liquidity and credit growth. However, the gains in stocks were curbed by concerns that rising oil prices due to geopolitical tensions in Iran may accelerate inflation and curb spending in Asian economies. The domestic benchmarks extended gains during afternoon trade tracking a rally on Asian stocks. The benchmarks pared some gains before regaining momentum and surging to the day's high amid speculation that RBI may cut CRR to boost liquidity. The benchmarks retreated a little from the day's high but still closed on a strong note, with the Sensex and the Nifty gaining over 75% each. Among the BSE Sectoral indices, BSE Realty and BSE Consumer Durables ended up 4.34% and 3.29% respectively.

Among the 30 Sensex stocks, BHEL, ONGC, Hindalco Industries, RIL and Tata Steel ended up 4.78%, 3.70%, 2.95%, 2.92% and 2.79% respectively. Among the Sensex stocks, there were 19 advances, 10 declines and 1 stock remained unchanged. On BSE out of total shares traded 3154, shares advanced were 1703 while 1338 shares declined and 113 were unchanged.

On the Economic front, RBI on Tuesday hinted towards another cut in the cash reserve ratio to ease liquidity conditions in the financial system and boost credit growth.

On the Global front, the International Monetary Fund (IMF) welcomed the Greek second bailout deal on Tuesday but insisted that a decision on its contribution to the Greek financing program will only be taken in the second week of March.

On the Asian front, Shanghai Composite ended up 0.75%, Hang Seng closed higher by 0.25% and Nikkei 225 down 0.23% on Tuesday.

On the European front, CAC 40 was down 0.8%, DAX was down 0.78% and FTSE 100 was trading lower by 0.35% on Tuesday.

On the Corporate front, HCL Infosystems bagged a Rs 278 crore contract from the Tamil Nadu government for free distribution of laptops to government school children. The stock ended up 2.59% at Rs 49.60 on the BSE.