Jagannadham Thunuguntla, chief executive officer at Delhi-based SMC Capitals, termed the surge in stock prices as a “strong bear market rally”. “We have seen investors’ interest coming back to the market. However, it may not be the long-term sustainable kind of money,” he said. Monday’s rally was primarily driven by bears covering their short positions before the derivatives settlement (on Thursday) and pre-election buying, Thunuguntla added.

1. Obama fires up Street
Mar 23 2009
The benchmark Sensex on Monday zoomed 457.34 points or 5.10 per cent, to close at 9,424.02. This is the biggest
single-day rally for the index since December 10, 2008.
Similarly, The National Stock Exchange’s (NSE) S&P CNX Nifty climbed 132.85 points, or 4.73 per cent, to end the
day at 2,939.90.
The rally was triggered by a firm start by European markets and news that the US government was planning to inject
over $1 trillion into the financial system to rev up the economy.
Banking (up 6.66 per cent), oil & gas (6.40 per cent) and metal (6.31 per cent) stocks led the rally. The trading
volumes touched Rs 76,594.98 crore, the highest since September last year.
The US government unveiled a plan that will use up to $100 billion in funds from the troubled asset relief programme
(TARP) and capital from private investors in order to generate $500 billion to buy toxic assets. The programme could
potentially expand to $1 trillion over time. The plan was announced after the close of Asian markets.
“This plan will release massive liquidity in the system,” said Manish Sonthalia, senior vice-president – research &
strategy, Motilal Oswal Fiancial Services.
Sonthalia said the barometer index may move up to 10,500 -11,000 levels before the general elections start on April
16. “There is a huge amount of money on the sidelines (waiting to be invested in markets),” he added.
Markets rose across Asia, but the Indian stock market outperformed. Hong Kong’s Hang Seng surged 4.78 per cent
to close at 13,447.42, while Japan’s Nikkei 225 ended 3.39 per cent higher at 8,215.53. South Korea’ Kospi,
Singapore’s Strait Times, China’s Shanghai Composite and Taiwan’s Taiex also closed about 2-4 per cent higher.
The European and US markets were trading 1-3 per cent higher at the time of going to press.
With the exception of DLF Ltd, which fell 2.16 per cent to Rs 167.40, all the other stocks on the 30-share Sensex
rose. Overall, 1,629 (61.66 per cent) stocks ended in a positive territory while 899 stocks declined.
Top gainers on Sensex included Ranbaxy Labs (up 10.80 per cent to Rs 161.05), Tata Steel (up 10.39 per cent to Rs
194.40), Reliance Infra (up 9.88 per cent to Rs 530.60), Hindalco (up 9.35 per cent to Rs 52.65) and HDFC (up 8.44
per cent to Rs 1,528.80).
Index heavyweights Reliance Industries ended up 7.56 per cent to Rs 1,439.80, while ICICI Bank was up 7.36 per
cent to Rs 346.65.
As per the provisional data available on the Bombay Stock Exchange (BSE) website, both foreign institutional
investors (FIIs) and domestic institutional investors (DIIs) were net buyers of Indian shares worth about Rs 376 crore
each in the cash market on Monday.
Jagannadham Thunuguntla, chief executive officer at Delhi-based SMC Capitals, termed the surge in stock prices
as a “strong bear market rally”.
“We have seen investors’ interest coming back to the market. However, it may not be the long-term sustainable kind
of money,” he said.
Monday’s rally was primarily driven by bears covering their short positions before the derivatives settlement (on
Thursday) and pre-election buying, Thunuguntla added.