The key benchmark indices extended initial gains to hit fresh intraday highs in morning trade ahead of the Union Budget 2011-2012. The market breadth was strong. Except the BSE Auto index, all the rest sectoral indices on BSE gained. Index heavyweight Reliance Industries (RIL) extended initial gains on a possible foray into the financial sector. The BSE 30-share Sensex was up 162.43 points or 0.92%.
Shares of retailer rose on expectations government may unveil roadmap for allowing foreign direct investment (FDI) into retail sector. Education sector stocks were up across the board on expectations that the Budget will increase outlay on the education sector. Auto stocks fell after Petroleum Minister S Jaipal Reddy on Friday said he will take the issue of fuel retail prices to an Empowered Group of Ministers soon. PSU OMCs also edged higher. Oil explorations stocks rose on higher crude oil prices. Construction stocks edged higher on expectations of government’s thrust on the infrastructure sector in the Budget. Realty stocks, too, rose.
The market edged higher in early trade. The Sensex extended initial gains to hit fresh intraday high in morning trade.
Stocks rose for the second day in a row today after Finance Minister Pranab Mukherjee on Friday, 25 February 2011, said Indian markets need not worry over global oil price uncertainty, indicating Monday’s budget may ease taxes and rationalise subsidies to cushion the impact of surging global oil prices. US crude oil futures for April 2011 delivery were at $99.58 a barrel, up $1.70 or 1.74%. Oil prices rose as political uncertainty in the Mideast and North Africa continued to rattle supply fears.
At 10:20 IST, the BSE 30-share Sensex was up 162.43 points or 0.92% to 17,863.34. The index gained 168.72 points at the day’s high of 17,869.63 in morning trade. The Sensex rose 31.47 points at the day’s low of 17,732.38 in early trade.
The S&P CNX Nifty was up 50.05 points or 0.94% to 5,353.60.
The BSE Mid-Cap index rose 1.22% and the BSE Small-Cap index gained 1.25%.
The market breadth, indicating the health of the market, was strong. On BSE, 1487 shares advanced while 558 shares declined. A total of 70 shares remained unchanged.
Among the 30-member Sensex pack, 20 rose while the rest fell.
Index heavyweight Reliance Industries (RIL) rose 2.17% on reports the Reliance Industries (RIL) group owned by billionaire Mukesh Ambani is in talks with Japan’s Orix Corp to acquire the latter’s 23.87% stake in Infrastructure Leasing and Financial Services (IL&FS) for around $1.2 billion.
RIL recently announced a major deal with BP whereby BP will take 30% stake in 23 oil and gas blocks of RIL. RIL would also be entitled to future performance payments of up to $1.8 billion based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to $20 billion.
PSU OMCs rose after Petroleum Minister S Jaipal Reddy on Friday said he will take the issue of fuel retail prices to an Empowered Group of Ministers soon. BPCL, HPCL and Indian Oil Corporation rose by between 1.39% to 2.75%. Hike in fuel prices could improve finances of PSU OMCs.
Oil exploration firm rose as rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. ONGC, Oil India and Cairn India rose by between 2.32% to 2.75%.
Construction stocks edged higher on expectations of government’s thrust on the infrastructure sector in the Budget. Bhel, Hindustan Construction Company, Larsen & Toubro, Nagarjuna Construction Company, IVRCL Infrastructure and Projects rose by between 0.79% to 3.35%.
Prime Minister Dr Manmohan Singh had said this month that discussions are going on to create an infrastructure development fund and Finance Minister Pranab Mukherjee may make some announcements in this direction in the Budget.