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Sensex jumps 1.8% on gas price hopes

business Updated: Jun 27, 2013 21:48 IST
HT Correspondent

Indian stock markets rallied on Thursday to close at their highest in a more than a week, with shares in energy companies such as Reliance Industries and IT companies gaining on market optimism.

Broader sentiment was supported by data showing the current account deficit for 2012-13 was a lower-than-expected 4.8% of gross domestic product (GDP).

The benchmark BSE Sensex rose 1.75%, or 323.83 points, to end at 18,875.95 — its highest close since June 19. The broader NSE index rose 1.68%, or 93.65 points, to end at 5,682.35.

“The pre-market announcement that current account deficit narrowed, helped the rupee recover from Wednesday’s historic low. This set a positive tone for the day,” said Jayant Manglik, president (Retail distribution), Religare Securities.

Shares in oil companies gained on expectation that the cabinet would increase gas prices. RIL gained 3.3%, Oil India 1.9% and ONGC 3.8%. The BSE oil and gas index ended up 3.22%. “A possible revision in gas pricing would be a factor,” said Dipen Shah, senior vice-president, private client group Research, Kotak Securities.

Software exporters gained on expectations that the weaker rupee would boost their earnings, dealers said. Tata Consultancy Services rose 3.8% and Infosys 3.5%.

Trading was volatile due to the expiry of derivatives at the end of the session. Starting on Friday, the focus is likely to return to foreign investors, who have sold a net of Rs 11,133 crore over the previous 13 sessions.

So what does the individual investor do? "Markets are expected to be volatile and so any short term approach will not be a good approach," said Shah.
Manglik cautioned that the rebound may not last. “Considering Thursday's market moves, we will see further recovery in near future but sustainability will remain a concern on both domestic and global fronts due to negative bias,” he said.