Sensex ended the day after rising by 220.03 points while Nifty, pushed up by IT stocks, brought the index to 11,844.
It was a day when the BSE Sensex crossed the 40,000 mark, ending the day at 40,051 with an increase of 220.03 points or 0.55 per cent. Another day of upwards movement on Nifty, pushed up by IT stocks, brought the index to 11,844.10, a rise of 57.25 points or 0.49 per cent.
What made Nifty stay in the green, despite some financial stocks witnessing profit booking, was the contribution from TCS, which gained 2.88 per cent to close at Rs 2,258, and Infosys, which gained 1.51 per cent to close at Rs 660. Infosys, which had remained in the doldrums after allegations of accounting fiddle by some whistleblowers, saw its spurt after investors discounted the damage.
On Wednesday, there were profit-booking in some segments, though that was limited on the Nifty, which lost just 39 points from its high of the day at 11,883. After some more companies came with a positive outlook on festive numbers, the overall mood of the market remained largely positive. The first test of the positive mood would be when auto sales numbers for October are announced on Friday.
If the numbers show an improvement, which seems likely, we can expect to see a fresh round of upward movements in the markets. It is likely to be more broad-based as that would further confirm some recovery in the overall economy.
This hope of improvement in the auto numbers spilled over to the auto ancillary stocks, some of which registered good gains after a long period. That indicated that the order book of these ancillaries had started to improve, in turn indicating that auto companies may be in a better position in the near term.
On the financial sector side, public sector banks continued to registered gains for the third consecutive trading session. The reason behind it is that another mid-sized PSU bank showed an improvement in its gross non-performing assets.
Thursday being the monthly and weekly expiry day for options contracts, both in index and stock futures, volatility may spike up. Unlike last month, when the mood was clearly bearish, this time the data points are in favour of the Bulls. Investors should continue to rebalance their portfolios in light of the quarterly results, which are continuing to pour in with somewhat better figures.
(The author is an analyst at Market Wizards Securities Pvt Ltd)