The Sensex and the Nifty gained more than 2 per cent on Monday on

RELATED ARTICLES Sensex ends flat; outlook still weak Sensex regains 16k level; ends 274 pts higher Sensex dips below 16k as rupee breaches 56 level Sensex tumbles 157 pts as rupee slumps to record low Sensex ends flat; investors worry over weak rupee

firm global cues and robust domestic industrial production data that was announced on Friday.

The Sensex crossed the 19,000 mark soon after the market opened, closing the huge gap created by the positive endings in US and Asian markets on Friday, when Indian markets were closed for a holiday. Strong opening in other Asian markets also maintained the momentum.

At the end of the day, the BSE benchmark closed at 19,208 points, up 408 points over the previous close, while the S&P CNX Nifty closed at 5,760 with a gain of 120 points. Both hit their 32-month highs. Sensex had touched an intra-day high of 19,243 after the positive openings of European markets and Dow futures.

Foreign institutional investors were net buyers by Rs 2,520 crore, according to provisional data from the bourses.

Shares of eight large-cap companies -- SBI, HDFC, HDFC Bank, Infosys, ONGC, Crisil, Oriental Bank of Commerce and MRF -- hit new highs.

“The 1,000-point rally from 18,000 to 19,000 is driven largely by frontline banking stocks like SBI, ICICI Bank and HDFC Bank, contributing 70 per cent. Though the market looks overbought, these stocks would continue the run as long as there is liquidity,” said Jagannadham Thunuguntla, head of equities at SMC Capitals.

Vinesh Menon, deputy CEO (online investment & stock broking), Bajaj Capital, said the rally had been quite strong globally since Thursday. “On Friday, the IIP data at 13 per cent was much above the expectation of 7.5 to 8 per cent.”

“Chinese industrial production data that came on Monday -- at 13.9 per cent -- was also above expectations. The combined effect was very good for the market. Also, the rains have been good this year, so agricultural production, which used to lag, will now catch up with industrial production,” Menon said.

Anita Gandhi, director and head of institutional business, Arihant Capital Markets, said the rally was driven by FIIs. “Some of the domestic insurance companies booked profits while mutual funds’ participation was limited.”

Domestic institutional investors were net sellers by Rs 961 crore, according to provisional data from bourses.

The banking sector has been seeing strong buying interest for the past few sessions. Among sectoral indices, BSE Bankex was the top gainer with 3.62 per cent.

“Banking counters have rallied, driven by the liquidity so far. The credit policy review on September 16 will give a direction to these stocks,” Gandhi said.

Other sectoral gainers were BSE Oil & Gas (2.57 per cent), Realty (2.46 per cent) and Metal (1.59).

Gains in Sensex heavyweight Reliance Industries towards the close of the day prevented losses due to profit-booking in other index constituents. RIL closed at Rs 992.20, up 3.58 per cent.

Among banks, SBI gained 5.52 per cent at Rs 3147.25, ICICI Bank 4.43 per cent, HDFC Bank 1.86 per cent and PNB 1.93 per cent.

The gains were more pronounced in large-cap companies, which experienced substantial correction towards the end of August while mid caps soared. On Monday, BSE Mid-Cap and Small-Cap indices gained just 0.77 per cent and 0.22 per cent, respectively.

The combined market turnover on Monday was sharply up at Rs 1,69,831 crore, largely due to a turnover of Rs 1,49,175 crore on NSE’s futures and options segment. The turnovers in the cash segments on BSE (Rs 4,974 crore) and NSE (Rs 15,781 crore) were below daily averages, showing a lack of retail participation.

Alex Matthew of Geojit BNP Paribas said SBI was moving up on rumours of merger of more subsidiaries and a stock split. “ONGC looks attractive at current levels and can continue its run,” he added.

On ONGC, which hit a new high on Monday, Deepak Pareek, oil and gas analyst at Mumbai-based Angel Broking, said: “We are waiting for additional triggers such as clear policy on subsidy sharing and deregulation of petrol prices along with reimbursement of royalty paid on behalf of Cairn for the Rajasthan asset. These could lead to a material uptake of the stock.” On BSE, the stock moved up by Rs 20.35, or 1.50 per cent, to Rs 1,375.90.

raviranjan@mydigitalfc.com

(With inputs from Sanjay Vijay Kumar in Chennai and Siddharth P Saikia in New Delhi)