SENSEX, NIFTY UP 2%; ICICI BANK, L&T, ITC LEAD
DATE: 29/06/2012
Indian equity benchmarks rallied quite sharply, outperforming its Asian peers after better than expected steps have taken by European Union at its summit on first day to solve credit crisis.
Bulls remain strong since early trade. The BSE benchmark shot up 372.79 points or 2.19% to 17,363.55 and the NSE benchmark rose 112.35 points or 2.18% to 5,261.50.
Foreign research firm Morgan Stanley upgraded Indian equities to Equalweight, after being Underweight since the first quarter of 2011, saying India is now trading at a price to book multiple of 2.1x, close to the trough valuations of 2.0x in the 2002 and 2008 cycles.
"This is an indicator of the extent to which the India market is already pricing in the adverse global environment and the current domestic situation of high inflation and slower trend GDP growth," it said. Morgan Stanley adds Indian stocks tend to perform well versus MSCI emerging market indexes after a period of oil price declines.
The Indian rupee gained further, appreciating 45 paise to 56.35 as against the US dollar.
Country's largest private sector lender ICICI Bank, and engineering and construction major by sales Larsen & Toubro shot up 3.7% each.
Top commercial vehicle maker Tata Motors, Cigarette major ITC, India's most valued stock Reliance Industries, top software services exporter TCS and private sector lender HDFC Bank were up 2-3%.
Public sector lender State Bank of India gained 2.5% and car maker Maruti Suzuki surged over 4%.
Asian markets like Nikkei, Straits Times, Kospi and Taiwan Weighted gained more than 1.5% while Hang Seng rose over 2%. Shanghai was up 1% after European leaders have agreed to take emergency action to bring down Italy's and Spain's spiralling borrowing costs. The consensus saw the 17 bloc nations agreeing to create a single supervisory body for euro zone banks by the end of this year.
In an interview to CNBC-TV18, head- Asia strategy, Patrick Perretgreen of Citi says the latest developments from the two-day EU summit are positive for debt-ridden Spain. “The news that without preferential seniority status, the European Stability Mechanism (ESF) would be able to lend directly to recaptalise banks without increasing a country's budget deficit is also a good move,” he adds.
POWERED BY: MONEY CONTROL NEWS
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