The market closed well above yesterday’s high and may hit 5,365, and then 5,400

Dispelling fears of taxes on investments through P-Notes by the government saw the market move higher since the opening bell. We had mentioned in our closing report yesterday that if the Nifty manages to close above 5,195, the downtrend may be arrested. Today the index went on to hit its five-day intraday high (including today) and more than covered the losses incurred in the prior two days. The index managed to even close above its 20-day moving average and witnessed a maximum percentage gain since 3rd January 2012.  

If the benchmark manages making higher high and stays above 5,290, we may see an upmove to the level of 5,365, and then up to 5,400. The Nifty saw a huge gain on lower volume of 71.40 crore shares on the National Stock Exchange (NSE).

The market opened on a positive note following assurance from finance minister Pranab Mukherjee that government on Thursday will clarify its position on taxation of investments from overseas, amid foreign institutional investors (FIIs) expressing concern on the proposed anti-tax avoidance rules. The Nifty opened 28 points up at 5,207 and the Sensex gained 58 points to resume trade at 17,117.

Across-the-board buying saw all sectoral indices trading with gains as trade progressed. Fresh assurances from the finance minister that persons investing in stock markets through P-Notes will not have to pay taxes in India, pushed the market further northward in post-noon trade. The market hit its intraday high around 3.00pm with the Nifty touching 5,307 and the Sensex climbing to 17,440.

The market closed a tad of the highs with the Nifty gaining 117 points (2.25%) to 5,296 and the Sensex jumping 346 points (2.03%) to settle at 17,404.

The advance-decline ratio on the NSE was positive at 1321:424.

Among the broader indices, the BSE Mid-cap index jumped 2.35% and the BSE Small-cap index surged 2.04%.

The rally saw all sectoral indices settling higher. The main gainers were BSE Oil & Gas (up 2.82%); BSE Realty (up 2.61%); BSE Metal (up 2.58%); BSE PSU (up 2.57%) and BSE Bankex (up 2.55%).

The Sensex was led by Tata Steel (up 4.04%); Maruti Suzuki (up 3.76%); Hindalco Industries (up 3.73%); ICICI Bank (up 3.64%) and Reliance Industries (up 3.23%). Jindal Steel (down 0.69%) and Sun Pharma (down 0.23%) were the laggards on the index.

The Nifty toppers were Kotak Mahindra Bank (up 4.84%); IDFC (up 4.61%); SAIL (up 4.02%); Ranbaxy (up 3.73%) and Hindalco Ind (up 3.69%). The key losers were Cairn India (down 0.98%); Jindal Steel (down 0.74%); Sun Pharma (down  0.67%) and Hindustan Unilever (down 0.33%).    

Markets in Asia settled mostly higher on hopes of European policymakers, who are meeting to day, would hike the Eurozone bailout fund to help cash-strapped nations. The gains were also supported by better-than-estimated earnings from Chinese banks.

The Shanghai Composite rose 0.47%; the Jakarta Composite gained 0.40%: the KLSE Composite climbed 0.69%; the Straits Times advanced 0.55% and the Taiwan Weighted settled 0.77% higher. Bucking the trend, Hang Seng declined 0.26%; the Nikkei dropped 0.31% and the Seoul Composite shed 0.02%. At the time of writing, the key European indices were 0.60% to 1.22% higher and the US stocks futures trading in the green.

Back home, foreign institutional investors were net sellers of a huge Rs1,332.85 crore worth of stocks on Thursday, a large part of which would have a block deal by a private equity investor (possibly Warburg Pincus sale of Kotak Mahindra Bank), while domestic institutional investors were net buyers of shares totalling Rs229.67 crore.

State-run Oil & Natural Gas Corporation (ONGC) plans to sign an agreement with ConocoPhillips on the exploration and development of shale-gas reserves and deep-water oil and gas blocks. ConocoPhillips is the third-largest integrated energy company in the US and the fifth-largest refiner in the world. The Indian exploration major gained 3.05% to close at Rs268.35 on the NSE.

Medium and heavy vehicle major Ashok Leyland has said that it will form a separate subsidiary as it explores expansion into the aerospace business with global partners. This is part of the automaker’s plan to diversify beyond manufacturing vehicles. The stock jumped 4.30% to settle at Rs30.30 on the NSE.

Strides Arcolab has received USFDA approval for Methotrexate Injection USP 25 mg/ mL packaged in 1 gram/ 40 m, 50 mg/2 mL, 100 mg / 4 mL, 200 mg/ 8 mL and 250 mg / 10 mL single-dose vials (preservative-free). Methotrexate is a chemotherapy drug used either alone or in combination with other agents. It is used as a treatment for some autoimmune diseases including rheumatoid arthritis, psoriasis, psoriatic arthritis, lupus and Crohn's disease, to name a few. Strides finished 1.18% lower at Rs582.20 on the NSE.