The markets continued their upbeat mood right till the last hour of trading to end at a 2-1/2 year highs. The Sensex registered a new high of 18,475 before closing at 18,442, up 185 points, and the Nifty ended above the crucial 5500 mark at 5,537, gains of 58 points.
Today was quite an eventful day for the markets, with the Nifty crossing the 5500 mark at the very start of trade. It had previously touched this level on February 5, 2005.
This strong opening was in contrast to the flat ending at the US markets and a flat Hang Seng. As the day progressed, the markets went from strength to strength.
Another prop for the surging market was the food inflation data. The food inflation was down 10.35% in the first weeek of August as prices of vegetables, specially potato and onion, declined.
Food inflation, which was 11.4% for the week ended July 31, was in double digits for the second consecutive week, after it remained in single digits for a fortnight in mid-July.
On a yearly basis, potato became cheaper by almost 50%, while vegetables saw a decline of 22.12%. Onion prices also slid by 6.91%.
Cereals prices, however, rose by 7.40%, driven mainly by the higher prices of pulses, rice and wheat.
Among the sectoral indices on the BSE, the day belonged to Bankex, FMCG and Metal. IT and Teck oscillated between the red and green throughout the day, but finally ending in the red. PSU and Realty, however, languished at the bottom of the charts.
The major gainers on the banking counter were Union Bank, gaining 5%, followed by Yes Bank and ICICI Bank adding 4% each.
On the FMCG front, Ruchi Soya up 8% led the index throughout the day, followed by Tata Global and Godrej Consumer Products, adding 4% each. In the metal space, Hindustan Zinc up 3% was the undisputed leader. Jindal Saw and Jindal Steel, inching up 2% each, were the other major gainers.
The major draggers in the IT space were HCL Technologies and Rolta India down 1% each, followed by Wipro, Mphasis and Infosys. In the PSU space Natioanl Aluminium shed nearly 3%.The other prominent ones were Rashtriya Chemicals, ONGC and Rural Electrification Corporation.In the broader market space, the midcap index was up 0.9% and the smallcap index was up 0.7% compared to the benchmark index, which was up 1%.
This is after nearly two weeks that the Sensex has outperformed the smallcap and midcap indices.
The gainers in the midcap space were Wockhardt, up 20% for the third concecutive day followed by MVL, which gained 15% and Thomas Cook, which added 10%. In the smallcap index, Kingfisher Airlines and Marg led the gainers charts, up 12% each; Finolex Industries added 11% and Natco Pharma gained 10%.
The gainers on the Sensex-30 were ACC, gained nearly 5% at Rs 880 and ICICI Bank added 4% at Rs 1012.
The other significant gainers were HDFC,Jaiprakash Associates up 3% each, Jindal Steel, Hindalco and Reliance Infrastructure added 2% each. Index heavyweight RIL moved up 1.2% at Rs 976.
ONGC and Tata Power down 1% each at Rs 1,267 and Rs 1,298 respectively were the major losers on the Sensex. Tata Motors, Bharti Airtel, SBI and Mahindra & Mahindra were the other prominent losers on the BSE.
The market breadth ended on a positive note. Of the total 3071 shares traded on the BSE, 1,650 shares had advanced while 1,297 had declined.
