US budget deal, India economic data drive Sensex to 2-yr peak, Nifty to 6K mark

Jan 02 2013, 18:59 IST
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The 50-scrip NSE index Nifty breached the 6,000 mark during the session for first time since Jan 2011. (Reuters) The 50-scrip NSE index Nifty breached the 6,000 mark during the session for first time since Jan 2011. (Reuters)
SummaryYesterday, Sensex closed at 20-mth high, fuelling expectations stocks may breach life-time high soon.

The BSE Sensex today shot up 133 points to hit two-year high and NSE Nifty breached 6,000-mark with oil, banking and auto shares jumping on buying support from funds after the US cleared the budget bill and India's economic data showed improvement - manufacturing sector in December grew the fastest in 6 months.

After opening on a strong note at 19,693.30 points, the BSE benchmark continued its upward march to touch session's high of 19,756.68. It finally settled with a gain of 133.43 points, or 0.68 per cent, at 19,714.24 points, its highest closing since January 6, 2011.

Yesterday, Sensex closed at 20-month high, fuelling expectations that stocks may breach life-time high soon.

"Market can touch an all-time high (21,206.77) before March," said Motilal Oswal Financial Services CMD Motilal Oswal.

A strong upmove in shares of ICICI Bank, SBI and HDFC, supported by rise in RIL and ONGC and auto pack, including Bajaj Auto, Maruti Suzuki and Tata Motors, helped Sensex log gains today.

Similarly, the 50-scrip NSE index Nifty, which breached the 6,000 mark today for the first time in two years, closed at 5,993.25 points -- a rise of 42.40 points, or 0.71 per cent. It had touched the intra-day high of 6,006.05.

Meanwhile, overcoming Republican resistance, the US House of Representatives late yesterday night passed the "fiscal cliff" bill by 257 to 167 votes, ending a dramatic New Year's Day showdown over income taxes and deep federal spending cuts.

"The New Year has begun on a promising note thanks to some positive global factors," said K Subramanyam, AVP Institutional Sales, Asit C Mehta Investment Intermediates.

Besides, India's manufacturing sector growth improved further in December, registering the fastest pace in 6 months, driven by a strong pick up in new orders, an HSBC survey said.

Overall, around 1,800 stocks rose today on the BSE, pushing up investor wealth up by Rs 50,000 crore.

"Fuelling the rally in the market was expectation that RBI may cut interest rates," said Delhi-based broker Deepka Pahwa. Firm trends in Asian and European markets also boosted the domestic market sentiment.

Globally, Asian stocks ended higher as key indices in Hong Kong, Singapore, South Korea and Taiwan firmed up by 1.04-2.89 per cent. China and Japan markets were closed today.

European stock markets were also trading higher in their afternoon deals following events in US. Key indices in France, Germany and London moved up by 1.59-2.04 per cent.

Coming back to India, with manufacturing PMI up and

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