A clear mandate for the Congress-led United Progressive Alliance
(UPA) in Lok Sabha elections send stocks surging with trading on
the bourses halted for the day at about 11:55 IST. For the first
time in the history of the stock markets trading was halted because
the market-wide circuit were applied due to a solid surge. Earlier,
there have been instances when trading was halted when market-wide
circuit filters were applied due to a market crash.
The 30-share Sensex was up 2099.21 points or 17.24% at 14,272.63
and the 50-unit S&P CNX Nifty gained 636.40 points or 17.33% to
4,308.05, when trading was halted for the day
BSE clocked a paltry turnover of Rs 77 crore. The combined turnover
in the cash and the derivatives segment of BSE and NSE totaled Rs
3103. Only 846 stocks were traded on the BSE while 202 stocks
witnessed action on the NSE.
Trading was halted in just 16 seconds after the market re-opened at
11:55 IST. Earlier in the day, trading was halted within seconds of
opening as the market soared following a clear mandate in the Lok
Sabha election. A clear mandate for the Congress-led United
Progressive Alliance (UPA) boosted hopes a strong coalition would
be able to push through economic reforms that would boost foreign
investment. The 30-share Sensex surged 14.70% or 1,789.88 points to
13,963.30 and the 50-unit S&P CNX Nifty gained 531.65 points or
14.48% to 4203.30.
The BSE Sensex attained its highest closing since 11 September 2008
and the S&P CNX Nifty attained its highest closing since 10
September 2008.
The market breadth, indicating the overall health of the market,
was strong. On BSE, 833 shares rose as compared with 11 that fell.
A total of 2 shares remained unchanged.
The BSE Mid-Cap index rose 12.06% and the BSE Small-Cap index rose
9.09%. However, both these indices underperformed the Sensex.
The BSE Realty index (up 25.37%), the BSE Capital Goods index (up
23.47%), the BSE Bankex (up 20.27%), the BSE Oil & Gas index (up
19.57%) outperformed the Sensex.
The BSE FMCG index (up 6.78%), the BSE Healthcare index (up 8.04%),
the BSE IT index (up 11.41%), the BSE Auto index (up 12.12%), the
BSE Consumer Durables index (up 13.63%), the BSE TECk index (up
14.95%), the BSE PSU index (up 15.76%), the BSE Metal index (up
16.64%), the BSE Power index (up 17.09%), underperfomed the Sensex.
The market soared today, 18 May 2009, following a thumping victory
of the Congress-led United Progressive Alliance (UPA) government in
the Lok Sabha elections. A clear mandate for the UPA boosted hopes
a strong coalition would be able to push through economic reforms
that would boost foreign investment
On BSE, Bharat Heavy Electricals, Reliance Industries, HDFC,
Reliance Infrastructure, ICICI Bank, Bharti Airtel, Larsen &
Toubro, DLF, Reliance Communications, Jaipraksh Associates, State
Bank of India, rose by between 20.76% to 32.72%.
Infrastructure shares jumped on hopes the Congress-led UPA
government may boost spending on infrastructure sector after
emerging victorious in the general elections. India's biggest
engineering & construction firm by revenue L&T rose nearly 30% to
Rs 1280. India's biggest power equipment maker by revenue Bharat
Heavy Electricals rose 32.7% to Rs 2266.
Among other infrastructure stocks, Jaiprakash Associates, Gammon
India, GVK Power & Infrastructure, GMR Infrastructure, and IVRCL
Infrastructures & Projects rose 20% to 38.3%
Punj Lloyd surged 23.2% ahead of the Q4 March 2009, ahead of the
announcement its Q4 March 2009 results later today, 18 May 2009.
Shares of power and capital goods companies surged following a
thumping victory of the Congress-led United Progressive Alliance
(UPA) government in the Lok Sabha elections, clearing the way for
the landmark civilian nuclear deal with the US. Areva T&D jumped
21%, Reliance Infrastructure rose 22%, Hindustan Construction
Company rose 25%, Crompton Greaves rose 13.8%, Tata Power Company
rose 13%, Rolta gained 13%, ABB rose 13.9%, NTPC gained 11.9%, and
Walchandnagar Industries rose 10%
State-run companies advanced on hopes of recommencement of the PSU
disinvestment programme after the Congress-led UPA government got a
clear mandate in the Lok Sabha election. Dredging Corporation of
India rose 20%, Engineers India advanced 19.3%, HMT rose 20%,
Neyveli Lignite Corporation advanced 17%, Shipping Corporation of
India rose 10%, Hindustan Copper rose 10%, MMTC rose 20%, NMDC rose
20%, Power Finance Corporation rose 13.3% and Central Bank of India
rose 18%
It may be recalled that the BJP-led National Democratic Alliance
(NDA) had vigorously pursued PSU divestment. However, it was put in
deep freeze in the last five years by the Congress-led United
Progressive Alliance (UPA) government as the Left parties which
supported the UPA government from outside, were bitterly opposed to
the idea.
Consequently, in the past five years, the government raised just Rs
8,500 crore from disinvestment as against Rs 28,000 crore raised by
the BJP-led government in the preceding five-year period.
The UPA government's thumping victory in the 15th Lok Sabha
elections without the support of the Left parties has raised
expectations that the government may revive disinvestment
programme. The Congress party had in its manifesto released before
polls promised to go ahead with disinvestment while retaining a
majority holding in the state-run companies.
India's largest bank in terms of assets and branch network State
Bank of India soared 20.76% on hopes the Congress-led UPA
government may go ahead on a plan to merge six associate banks with
State Bank of India to create a Indian banking behemoth.
The process of creating a Indian banking behemoth was set in motion
two years ago, but got derailed due to resistance from the Left
parties. Although the board of SBI and its associate bank, the
State Bank of Saurashtra, had approved the merger in August 2007,
the government approved it only in August 2008 after the Left
withdrew its support to the government.
A merger of the associate banks with itself will give SBI the full
benefit of size. SBI and its associate banks enjoy a fourth of the
market share.
The SBI management may well be keen to merge the six associates at
the earliest, but that will hinge on government approval since the
government controls 59.41% of the equity in the bank.
India's largest motorbike maker by sales Hero Honda Motors soared
15.83% as index focused mutual funds took position in the stock
ahead of its entry in the coveted BSE 30-share Sensex with effect
from 29 June 2009. After trading hours on Friday, 15 May 2009, the
BSE announced that Hero Honda will replace Ranbaxy Laboratories in
the barometer index BSE Sensex with effect from 29 June 2009
Prime Minister Manmohan Singh's coalition defied predictions of a
tight election and was only about 11 seats short of an majority
from the 543 seats at stake, according to election commission data.
Congress' alliance took 261 seats, sweeping aside its nearest
rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party
(BJP), which won only 159 combined. Congress, which alone won 205
seats, needs a handful of partners to reach the 272 seats needed to
take power, and is expected to seek the support of more smaller
parties or independents. Congress leaders will meet on Tuesday to
officially endorse Manmohan Singh as prime minister, after which
the party will meet its coalition partners to decide potential new
allies.
Armed with a popular mandate, the Congress led UPA government is
going to stake claim today to run India for another five years. The
Congress and its allies will go to meet President Pratibha Patil
today to show that they have the numbers. The first meeting of the
newly-constituted Congress Parliamentary Party (CPP) is expected to
convened in a day or two to elect its leader. Singh, who is already
the Prime Ministerial candidate of the Congress, is also likely to
be elected by the MPs at a joint meeting of the UPA parties. The
Congress must form a government by 2 June 2009.
Financial sector reforms are likely to get a push in the coming
days, which were relegated to the back seat due to persistent
opposition from the Left parties, with the Congress-led UPA set to
form the next government. Left-less victory of the UPA over BJP-led
National Democratic Alliance (NDA) would not only signify the
formation of a stable government, but also revive hopes of a slew
of pro-market policy changes.
The index-based market-wide circuit breaker system applies at 3
stages of the index movement, either way viz. at 10%, 15% and 20%.
These circuit breakers when triggered, bring about a coordinated
trading halt in all equity and equity derivative markets
nationwide. The market-wide circuit breakers are triggered by
movement of either the BSE Sensex or the NSE S&P CNX Nifty,
whichever is breached earlier.
No comments:
Post a Comment