Sensex touches 14-month high, gains 404 points

Investors on Friday cheered big-bang reforms mainly FDI in retail sending the Sensex up by 517 points to a new 14-month high as the 0Samajwadi Party reassured the government of its support on a day Trinamool Congress pulled out of the UPA coalition. While the BSE benchmark index vaulted by 517 points to touch the intra-day high of 18,866.87, it closed the day with a net gain of 403.58 points or 2.2 per cent at 18,752.83 following some profit-booking. Even at the closing level, the Sensex was at 52-week high. Shares of domestic retail chains including Pantaloon, Shoppers Stop and Trent, went by up to 8 per cent on hopes that FDI will be pumped in these companies. The 30-share Sensex gains were on the back of handsome rise in ICICI Bank, L&T, HDFC Bank, RIL, and SBI shares. After opening 62 points higher on global cues, the BSE benchmark index built on initial gains as foreign funds gushed in with government on Thursday notifying its decision to allow FDI in multi-brand retail and aviation sectors, among others. Power, capital goods and metal stocks led Sensex’s rise after the government said withholding tax on overseas borrowings will be slashed to 5 per cent from 20 per cent. The approval to Rajiv Gandhi Equity Savings Scheme (RGESS) to encourage first-time retail investors to invest in stocks, also lifted the sentiment. Friday’s rise was the second biggest single-day gain by Sensex after September 14 this month. Across broader market, over 1,800 stocks closed with gains driving up investor wealth by a whopping Rs 1.27 lakh crore to Rs 65 lakh crore. The NSE 50-share Nifty index shot up by 136.90, or 2.46 per cent to 5,691.15 after rising to day’s high of 5,700.     “Markets ended the week at 52-week highs on the back of a 2 per cent plus gain...FDI in aviation and multi-brand retail were notified without any delay. Concerns about stability of UPA government were also largely addressed,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities. Meanwhile, Foreign Institutional Investors (FIIs) turned net sellers after continued buying for last ten days and sold shares worth Rs 73.67 crore on Thursday as per provisional data with stock exchanges. From gulftoday