Two weeks ago, the prospect of two equity issues raising over Rs 30,000 crore seemed daunting and liquidity concerns dragged stocks down. Contrary to expectations, the DLF and ICICI Bank issues have added strength to the market.
The Sensex closed the day with a 215 point gain at 14,296, and the Nifty added 67 points at 4,214.
The moment the ICICI Bank issue was fully subscribed stocks rallied and pulled the index up to its two-week high. “When international markets were going up Indian markets were subdued. Now that the big issues are done with, the market will concentrate on other factors,” said MAA Annamalai, director, Akshaya & Co. Good response to the ICICI Bank issue along with details on advance tax figures led the bears to cover their short positions.
Banks stocks basked in the light of positive sentiment and the rally was led by the State Bank of India, which shot up by 4 per cent to Rs 1,372. And while the majority of the bids for the ICICI Bank issue ranged between Rs 885 and Rs 915, in the secondary market the share touched an intra-day high of Rs 948.
“Most foreign institutional investors have been underweight on India and in the backdrop of the four-year performance they are coming in for high-class issues,” commented Gul Tekchandani, an equity analyst.
Among the stocks that propelled the Sensex were Larsen & Toubro, up 3.6 per cent to Rs 1,995.70 on announcement of a Rs 610 crore order for a building project in Dubai, and Reliance Industries, up 3.3 per cent to Rs 1,727.15 on a buy note from Goldman Sachs with a 12-month price target of Rs 2,060.