Street unleashes animal spirit

Street unleashes animal spirit

Sensex Zooms 439 Pts,Biggest Single-Session Pts Rise This Year,On PM Growth Talks & Euro Deal

Re Posts 2nd Biggest Single-Day Gain In 3 Yrs

TIMES NEWS NETWORK

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Mumbai: The sensex on Friday soared 439 points to 17,430,the biggest single-session points rise this year,on the back of governments positive moves aimed at reviving growth and developments in the Euro area.The days gain in the index,a twoand-half-month closing high this year,made investors richer by Rs 1.24 lakh crore with BSEs market capitalization now at Rs 61.4 lakh crore.
Fridays rally in the stock market also helped the rupee appreciate by 117 paise to 55.64 to the dollar,its second biggest single-day gain in three years.The highest gain was recorded on May 18,2009,the first trading session after the Manmohan Singh-led alliance came back to power for its second term at the centre.
The 2.6% gain in the sensex came after it became clear that the Prime Minister,who is credit with the economic liberalization process two decades ago,will himself take charge of the finance ministry and push for changes that have the potential to revive the countrys growth.As a result,after Pranab Mukherjee resigned on Tuesday evening,the sensex has gained 523 points.Singh had on Wednesday exhorted finance ministry officials to reverse the climate of pessimism revive the animal spirits in the countrys economy.
The days gains also came after leaders of Eurozone area agreed to use the European Central Banks bailout funds to support weak banks in the region.The bailout fund was originally set up to support struggling countries and not any individual institution.Market players here are upbeat on the twin developments,although they are now awaiting real action.Compared to the last four days,the pulse (on the street) is definitely positive since the PMs steps are aimed at boosting growth while the positive developments in Europe has the potential to bring in FII moneythe two things India needs badly now, said Nipun Mehta,an independent wealth advisor based in Mumbai.
The impact of such measures need some time to reflect on a monthly or quarterly basis.But markets move in anticipation of future results,and Fridays gains could be explained by the same logic,market players said.I wouldnt read too much into it.Sentiment has improved,but I would be cautious,will wait and see how these measures translate into benefits for the country, Mehta said.
Dalal Street would be looking at the corporate results and also the monsoon.The latest government data showed that since June 1,rainfall in the country was 18% below the long period average while an analysis by ratings major Crisil said it expected top 500 Indian corporates to see a 14-15 % rise in revenues during the quarter ending June 30,the slowest pace in the last six quarters.