Share prices rose sharply on Wednesday as bailout packages by governments worldwide, a rise in other Asian markets and some buying by foreign institutional investors (FIIs) were seen as factors that would drive a rally in the short-term. Mumbai's 30-share Sensex jumped 5.3 per cent at 9,655, up 492 points as blue chips rallied smartly.
“Global developments supported the market,” said Dinesh Thakkar, Chairman and Managing Director of Angel Broking. “Continued support by governments of the world to fight recession and the proposed bail out packages resulted in Asian stocks’ rising and in turn, improved the market sentiment in India.”
Reliance was up 9.7 per cent to Rs 1,227.20 per share and ICICI Bank rose 8.1 per cent to Rs 400.05. These two stocks have a weight of about 20 per cent in the Sensex. FIIs had made net purchases of shares worth Rs 51.2 crore ($10 million) on December 5, reducing the outflow from equities this year to $13.5 billion.
Thakkar said the current price levels are attractive for short-term trades and this added to the upsurge in prices of shares. There have also been periodic buying by FIIs this month, which is creating a feeling that the market could be bottoming out.
There was a relief rally in shares of metal and real estate companies. DLF Ltd was the top gainer with its shares rising by 18.9 per cent or Rs 41.8 to Rs 262.6 per share. Tata Steel Ltd, the country's largest maker of the alloy, rose 11 per cent to Rs 217.85.