The stock markets made a terrific comeback with Sensex reclaiming the 21,000-mark it touched December 11 as oil and gas stocks witnessed the biggest daily gain in 55 months following the Cabinet approval on higher gas pricing for Reliance Industries.
The S&P BSE Oil and Gas Index rose by 3.83% with all the 10 stocks listed on sectoral index gaining 1.00 to 4.6% after the Cabinet on Thursday allowed Reliance to sell natural gas at $ 8.4 per million British thermal units (mmBtu) from April 2014 - which is twice the current price of $4.2 per mmBtu -subject to company complying to bank guarantees.
This is the biggest daily gain for BSE Oil & Gas Index since May 18, 2009 when it surged 19.11% post the general election outcome.
Reliance was the biggest gainer on BSE-30 Sensex as it rose by 4.58% or Rs 39.10 to close at Rs 893.65 and contributed to nearly one fifth of the rise (81.38 points) to Friday’s Sensex.
As a result, the S&P BSE Sensex surged 371.10 points or 1.79% to close at 21,079.72 while the CNX Nifty gained 1.74% or 107.60 points to end the day at 6,274.25.
The foreign institutional investors went on a buying spree just a day after the US Fed announced tapering of its Quantitative Easing (QE) programme as they net bought equities worth Rs 990.19 crore on Friday.
The sharp pullback was also aided by people covering some of their short positions with just four sessions left for the December derivatives series.
The Nifty December futures on Friday closed at a premium of 18.1 as against a premium of 11.15 points on Thursday even as open interest went down by 3.16%.
Apart from oil and gas sector, heavy buying was seen in banking, auto and IT sectors that went up by 1.81%, 2.02% and 1.66% respectively. Among major frontline stocks, 46 out of 50 stocks listed on Nifty ended in green while 27 out of 30 stocks on the Sensex.
With two crucial central bank-US Fed and RBI- policy meets over, the markets are likely to take cues from domestic events, say experts.
“Markets will now be guided by further announcements of the taper and implementation of the same, political expectations and corporate performance. Markets will also be influenced by economic readings on inflation and inustrail growth data which will have a direct bearing on the future interest rate trajectory,” said Dipen Shah, Head- Private Client Group Research at Kotak Securities.