Reliance pack
Unlike Monday's rally which was spurred by Reliance Group stocks following Ambani brothers deciding to resolve the family feud amicably, Wednesday's run-up was led by cement, auto and FMCG sector stocks.
Reliance Group stocks seemed to be losing steam today with Reliance Industries and Reliance Capital clocking gains of over a per cent. However, Reliance Energy ended with marginal losses.
"Reliance Capital is the strongest of the Reliance Group stocks," averred Deepak Mohoni of trendwatchindia.com.
Auto ancillaries, select banking counters, housing finance companies and infrastructure stocks attracted significant buying even as steel, textile and select technology stocks wilted under selling pressure.
Autos in fourth gear
After Reliance, it was the turn of auto sector to prop up the indices with frontline counters surging over two per cent. Tata Motors also made the most of the positive sentiment with the stock clocking gains of over a per cent.
The gains were just not limited to four-wheeler counters but extended to two-wheeler stocks with Kinetic Engineering continuing to rally ahead with gains of over two per cent.
The mood was upbeat at cement counters too with ACC and Gujarat Ambuja hogging limelight. Both stocks posted gains of over a per cent. It was a good day for second-rung counters with Madras Cements leading from the forefront, rallying over two per cent.
Banks firm
Select banking stocks too contributed to the gains in the Sensex with Corporation Bank and Kotak Mahindra Bank posting gains of over four per cent.
The momentum was strong at Allahabad Bank, Bank of Baroda, Canara Bank and UTI Bank. Indusind Bank, Federal Bank and ICICI Bank closed firm. HDFC was the star performer on the back of UK's Standard Life selling 4.9 per cent stake in the company.
FMCG stocks put up a good performance with the FMCG BSE index surging over a per cent each. ITC and Nirma led the charge with the stocks surging over two per cent. Dabur, HLL and Marico ended in the positive turf.
Analysts views
Meanwhile, analysts sounded bullish about the future prospects of the markets.
"With the onset of monsoon, the sentiment is a little bullsih. We feel that market is liquidity driven. The foriegn investors are quite bullish on India," said Hemendra Kothari, Chairman, DSP Merrill Lynch. However, he felt that the valuations are a bit overstretched but not overpriced.
Echoing similar sentiments, Devesh Kumar, Head of Equities, ICICI Securities said, "In this round of rally the stocks which did not run up when markets moved from 6,500 to 7000 are participating in a big way. The momentum is a bit stronger than one would have thought."
Going forward, he said that markets are likely to remain firm.
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