Biggest gain of 2014 so far: Sensex up 376 points; Rupee gains 38 paise

Mumbai: The benchmark Sensex surged 376 points on Monday, clocking its biggest gain in seven weeks and in 2014, ahead of retail inflation figures and on expectations the US Federal Reserve would ease tapering after disappointing jobs data.

Investors also expect the RBI to keep interest rates unchanged in a bid to support growth after the Index of Industrial Production contracted 2.1 per cent in November.

There were hopes of inflation easing amid increased availability of winter crops. There was buying across the board as 11 out of the 12 BSE sectoral indices advanced, led by IT, Teck, Oil & Gas, Banking and Capital Goods stocks.

Only the Healthcare index fell. Heavyweights Infosys, TCS, Reliance Industries and ICICI Bank contributed the most to the gains in the Sensex. The 30-share S&P BSE Sensex opened higher and stayed in positive terrain through the day.

It ended at 21,134.21, a rise of 375.72 points or 1.81 per cent. It was the biggest gain since November 25, when the index added 387.69 points. The Fed said it would reduce its bond-buying programme, which has been a source of liquidity for most Asian and emerging markets, from this month.

US employment rose at the slowest pace in three years in December, according to a government report.

"Markets rose sharply on Monday, likely buoyed by the weak payroll data in US, which re-ignited optimism on the Fed taper programme. Expectations on the CPI inflation data which is due post-market hours, also kept the markets up," said Dipen Shah, Head - Private Client Group Research at Kotak Securities.

The 50-share CNX Nifty on the National Stock Exchange shot up 101.30 points, or 1.64 per cent, to 6,272.75. "The markets seem to be anticipating a healthy inflation figure, since that would reinforce that the RBI's decision to not raise the headline repo rate last month was the correct decision," said Raghu Kumar, Cofounder of RKSV.

Ahead of the RBI's monetary policy review on January 28, Economic Affairs Secretary Arvind Mayaram has pitched for shifting the policy focus to growth as interest rates do not have a bearing on food inflation.

The government is scheduled to release data for retail inflation today. Foreign institutional investors bought shares worth a net Rs 68.16 crore last Friday, according to provisional data from the stock exchanges.

"Markets were buoyed by some renewed buying spree by the FII community who have realised that it is pretty unlikely that Fed will go more aggressive on its tapering process," said Jignesh Chaudhary, Head of Research at Veracity Broking Services.

"The markets are anticipating some positive news from the inflation figures scheduled to be released later in the evening, which will prompt RBI to take some growth-boosting measures that will be good for the market," he said.

IT shares led the 21 gainers on the Sensex. TCS surged 3.88 pc, Infosys 3.29 pc, ICICI Bank 3.09 pc, ONGC 2.94 pc and Reliance Industries 2.58 pc. Tata Power declined 1.99 pc and Sun Pharma 1.19 pc. Among the S&P BSE sectoral indices, IT rose 2.92 pc, Oil & Gas 2.24 pc, Bankex 2.04 pc and Capital Goods 1.55 pc.

The market breadth remained negative as 1,415 stocks fell, 1,327 stocks rose and 134 ruled steady. Key indices in Hong Kong, South Korea and Taiwan ended higher while those in China and Singapore were lower. The Japanese markets were closed on Monday.

European markets were trading marginally higher as indices in France, Germany and UK moved up.

Next: Rupee gains 38 paise to one-month high of 61.52 against dollar

Rupee gains 38 paise to one-month high of 61.52 against dollar 

Mumbai: The rupee gained 38 paise to close at a one-month high of 61.52 against the dollar today after local stocks surged and exporters and banks sold dollars.

The rupee was also supported by weakness in the dollar overseas after disappointing US jobs data announced last weekend eased concerns about the Federal Reserve's tapering of the stimulus programme, a forex dealer said.

At the interbank foreign exchange market, the rupee opened strong at 61.52 a dollar from Friday's close of 61.90. It moved in a range of 61.41 to 61.64 before settling at the opening level of 61.52, a rise of 38 paise or 0.61 per cent.

The rupee is at the highest level since closing at 61.25 on December 11.

"It was a strong session for the Indian rupee, thanks to the weakness in the US dollar. Friday's poor non-farm payroll data led to losses in the US dollar...benchmark indices which closed on a strong positive note also helped rupee to post gains," said Abhishek Goenka, CEO of India Forex Advisors.

The 30-share Sensex jumped 375.72 points, or 1.81 per cent, to notch up its biggest gain in seven weeks. Overseas investors bought shares worth a net Rs 413.85 crore today and Rs 68.16 crore on Friday, according to provisional data with the stock exchanges.

"Rupee has started the week on a positive note, taking cues from the dollar index, which is trading weak for the third consecutive day as Friday's data showed the US economy had its weakest monthly job growth in three years in December," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

"Local equities closed up by over 1.5 per cent ahead of CPI data, which is expected to be better than seen in November," he said. Inflation as measured by the Consumer Price Index moderated to 9.87 per cent in December from 11.16 per cent in November, according to government data released after the markets closed.