BSE Sensex, NSE Nifty jump 5% in week, set all-time records; ONGC shares skyrocket 22 pct

Jun 07 2014, 14:40 IST
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BSE Sensex surpassed its previous all-time high, showing a sharp weekly gain of 1,179.12 points. (PTI) BSE Sensex surpassed its previous all-time high, showing a sharp weekly gain of 1,179.12 points. (PTI)
SummaryBSE Sensex logs best five-year gain. Reason? From HSBC PMI, RBI, to Narendra Modi.

Bulls roared back after taking a reprieve for a week, sending both key indices BSE Sensex and NSE Nifty up almost five per cent to touch their new peaks on positive developments during the week under review.

Increased buying by foreign funds, onset of the southwest monsoon, although few days late, likely hike in natural gas prices after July 1 and examining of raising import tax on sugar by the government to support local prices boosted the overall sentiments in the market.

Brokers attributed the rally to slight improvement in HSBC Indian Manufacturing Purchasing Managers' Index (PMI), a measure of factory production, in May, but most of all by the positive sentiment generated by hopes of economic reforms from PM Narendra Modi govt.

The sentiment also remained positive after the Reserve Bank of India (RBI) pleased markets by unlocking about Rs 40,000 crore of banking funds by cutting the statutory liquidity ratio (SLR) by 50 basis points.

Boosting investor sentiment, the RBI also allowed foreign portfolio investors to participate in the domestic exchange traded currency derivative markets.

However, the apex bank kept the key policy rates unchanged in the second bi-monthly monetary policy review 2014-15.

Shares of realty, metal, PSU, refinery, capital goods, power, consumer durable, banking and auto sectors firmed up sharply on good buying enquiries.

The BSE Sensex surpassed its previous all-time high of 25,375.63 registered on May 16 to log its new intra-day historic high of 25,419.14 during the week before settling the week at 25,396.46, showing a sharp weekly gain of 4.87 per cent or 1,179.12 points, the best in five years.

Similarly, the wide-based 50-issue CNX Nifty of the NSE also jumped to new intra-day peak of 7,592.70 before ending at 7,583.40, a sharp gain of 353.45 points or 4.89 pct.

Market also got the tonic following decision of the European Central Bank to cut its benchmark interest rates to unprecedented lows to pump money into the sluggish eurozone economy.

"Expectations of resolution to the gas pricing issue helped stocks like RIL and ONGC register gains. We see the monsoon progress and the budget to be the two important triggers," said Dipen Shah Head - Private Client Group Research, Kotak Securities.

Onset of Monsoon is expected to ease prices of food grains, helping RBI to control sticky inflation, say experts.

Fertiliser stocks rallied on reports that the Fertiliser Ministry has prepared a road-map for rationalisation of subsidy

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