Sensex gains another 400 pts as global rally continues

Dealers said gains across the region were broad-based as recent pessimism about economic recovery gave way to relief that the US corporate earnings season has not produced any big disappointments so far.

The finance secretary had come out with a statement that the governments disinvestment plan is expected to start in some weeks. This boosted investor sentiment and was reflected in the divestment beneficiaries like capital goods,realty,metal and power,which made investors cover their short positions created in stocks in these sectors. In the afternoon session,as the European markets and the US index futures markets were on the positive side,our markets saw renewed buying coming in, said Geojit BNP Paribas Financial Services research head Alex Mathews.

Dealers said a higher start for European bourses boosted investor appetite for riskier bets after the market appeared to lose steam due to concerns about the domestic economy and rich valuations.

Hong Kongs Hang Seng jumped 372.93,or 2.1 per cent,to 18,258.66 and South Koreas Kospi the regions best performer gained 2.6 per cent. Elsewhere,Australias benchmark index gained 1.5 per cent and Chinas Shanghai index rose 1.4 per cent.

But traders said the market may not be able to sustain gains in the near term,with profit-taking set to emerge unless investors are reassured corporate earnings growth will pick up pace in the next few quarters.

Last week,the market fell 9.4 per cent its biggest weekly fall in eight months after the governments budget disappointed investors who were expecting bold economic and financial reforms. Foreign investors who sold stocks worth over Rs 5,200 crore between July 6-13,also came back and bought stocks worth over Rs 255 crore on Wednesday.

STIMULUS YIELDING RESULTS: PRANAB

NEW DELHI: The raft of fiscal stimulus steps taken by the government since late 2008 are now yielding results,the finance minister told Parliament on Wednesday. Pranab Mukherjee also said the country was aiming to return to higher growth path as soon as possible. Asias third-largest economy expanded by 6.7 per cent in FY09,sharply slower than 9 per cent or more in previous three years,as high borrowing costs and then the global economic crisis hit. The government expects 7 per cent growth in FY10. reuters

TAX COLLECTIONS SIGNAL RECOVERY

New Delhi: The finance ministry on Wednesday said that customs duty collections at about Rs 18,000 crore in the first quarter of this fiscal and initial reports on steel and cement sectors point to a recovery in industry that would also benefit from tax cuts announced as part of stimulus packages. Customs collections are six per cent higher during April-June this year over the previous quarter,mainly on account of higher imports of raw materials and capital goods,Central Board of Excise and Customs chairman P C Jha said. PTI