Indian stocks made a smart recovery today with BSE Sensex rising 146 points to close at 19964.03 points on heavy buying in RIL and ONGC as diesel prices were virtually deregulated in a key economic reform measure.
After losing 169 points yesterday on RBI Governor D Subbarao tempering rate cut hopes, Sensex today shrugged off weak initial cues after oil marketing firms were authorised to make small price correction in diesel from time to time.
The 30-share Sensex closed with a gain of 146.40 points to settle at 19,964.03 points as RIL and ONGC jumped over 3 per cent each. The broad-based NSE index Nifty rose by 37.35 points, or 0.62 per cent, at 6,039.20.
Refinery giants, ONGC and Reliance Industries were the top gainers from the Sensex and contributed more than 80 points to the index rise. IOC, HPCL, OIL and BPCL also gained.
"...a step in right direction as it will help government to reduce pressure on fiscal deficit. Both upstream and downstream PSUs will stand to gain," Motilal Securities said.
Diesel prices in all probability may be hiked in the first instance that can be as early as tonight following the government decision that might prune the subsidy bill.
Realty, and IT stocks also attracted good buying support. Tata Motors, Bharti Airtel, Infosys, HDFC Bank, SBI, TCS, ITC and Wipro notched up handsome gains. IT stocks gained after HCL Technologies, which rose 4.3 per cent, reported 68.5 per cent jump in its net profit for the December quarter.
Telecom majors Rcom and Tata Teleservices rose around 2 per cent each after the government approved 50 per cent reduction in reserve price of spectrum used by CDMA operators.
The sentiment was also boosted following consistent buying by Foreign Institutional Investors bought shares worth net Rs 1,029.50 crore yesterday.
Most Asian stocks ended lower as key indices in Hong Kong, South Korea, Singapore, China and Taiwan declined by 0.07 per cent to 1.09 per cent while Japan's Nikkei inched up by 0.09 per cent.
European markets were also trading narrowly mixed as indices in London and Germany eased by 0.03 per cent and 0.34 per cent while France (CAC) moved up by 0.36 per cent.
Kishor P. Ostwal, CMD, CNI Research Ltd. said, "Nifty futures closed at 6052 after touching high of 6066. Oil stocks were the theme of the day."
Investors are now awaiting Q3 earnings from RIL and ITC tomorrow, said dealers.
Overall, 19 of the 30 Sensex-based scrips closed