Markets give thumbs up to PC

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The markets surged to scale their highest closing levels in nearly four weeks after the Union finance minister P. Chidambaram said that he intends to shortly unveil a path of fiscal consolidation and also fine tune policies and procedures that will facilitate capital flows into India.

The Sensex closed the day at 17,412.96 points gaining 215.03 points or 1.25 per cent while the Nifty climbed 66.85 points or 1.28 per cent to end the trading session at 5,282.55 points.

The overnight gains registered by the US market also provided the much needed boost for the domestic equities during their opening trade. On Friday, the US markets gained about 2 per cent after the US non-farm payrolls improved more than expected in July and also on the back of better jobless data.

The rally was well supported by Reliance Industries Ltd (RIL), which gained 5.71 per cent to hit a four-month high on reports that the company’s meeting with the oil ministry would ultimately pave the way for the approval of its investment plans for KG D6 block, which has been pending since the last two years. The stock closed the day at Rs785.30 and was the highest gainer among the Sensex constituents.

Another group company Reliance Industrial Infra also saw its share prices gain 11 per cent on Monday.

“The Nifty delivered a strong start for the week and was backed by index bellwether RIL. The stock has seen a prolonged phase of price consolidation and Monday’s rise comes as a welcome respite for long-term investors in the stock,” said Milan Bavishi, head research, Inventure Growth and Securities.

Auto stocks gained across the board with Tata Motors and M&M surging 3.51 per cent and 1.25 per cent respectively following impressive sales numbers registered during the month of July.

The provisional data from stock exchanges showed that FII purchased shares worth Rs555.73 crore.
According to the Emerging Portfolio Fund Research (EPFR), which tracks fund flows across the globe, the emerging market equity funds which posted their biggest weekly inflow expecting additional quantitative easing from European Central Bank (ECB) and US Federal Reserve last week is likely to reverse in coming days.

“Since neither meetings gave the markets what they are looking for, there’s a good chance this week’s inflows will reverse themselves, especially on the equity side where most of the money went into ETFs” said Cameron Brandt, director, EPFR Global Research.