Prospect of rate cut in US brings cheer:

The market got a leg up today, as Asian stocks rallied to three-week highs, led by exporters. Investors were delighted by prospects of rate cuts in the United States, Asia's top export market. Short covering in derivatives also aided the solid surge. Banking, auto, telecom shares and FMCG pivotals led the rally. The provisional closing of the Sensex was 13,311.78, a gain of 365.90 points for the day. The Sensex today reached its highest level in more than three weeks. The provisional closing of the Nifty was 3,877.20, a gain of 112.65 points. The market-breadth on BSE was strong. Against 1,644 shares rising, 973 declined while 75 did not change. Gainers had outpaced losers by a ratio of 1.68:1. Although breadth was strong on BSE throughout, it had weakened during the course of trading. Breadth was much stronger in mid-morning trade. At about 11:30 IST, the advance-decline ratio was 2.73:1. The US Federal Reserve policy-setting meeting on Wednesday dropped an explicit reference to the possibility of taking rates higher in its statement, sparking talk the next move could be a cut. The Fed left interest rates unchanged at 5.25%. US interest-rate futures indicated a 48% chance of a rate-cut by end - June 2007, compared with 24% before the Fed's announcement. Key benchmark indices in Asia were up by between 0.39% to 2% on Thursday. The Dow Jones industrial average shot up 159.42 points, or 1.30%, to 12,447.52 on Wednesday. The Standard & Poor's 500 Index jumped 24.1 points, or 1.71%, to 1,435.04. The Nasdaq Composite Index surged 47.71 points, or 1.98%, to 2,455.92. Turnover on BSE improved from Wednesday’s Rs 2730 crore to Rs 3555 crore today. Banks extended Wednesday’s gains. HDFC Bank gained 5.8% to Rs 1022 and ICICI Bank rose 3% to Rs 987. On Wednesday, ICICI Bank's ADR gained 4.3% to $40.31, and HDFC Bank's ADR rose 3.2% to $69.89. Buying also happened in PSU banks. State Bank of India rose 4% to Rs 1024, Bank of India gained 11% to Rs 174, Canara Bank surged 7.5% to Rs 207 and Punjab National Bank added 7%, to Rs 485. Banks had surged on Wednesday as well on value-buying, as well as due to short-covering in derivatives. Oil exploration major ONGC surged nearly 5% to Rs 853. As many as 4.6 lakh shares changed hands in the counter on BSE. US crude oil held firm near $60 a barrel after a big drop in US gasoline supplies raised worries of a crunch leading into the US summer driving season. Auto shares were in driver’s seat. Car major Maruti Udyog (MUL) gained 4.8% to Rs 830.50, Hero Honda advanced 4.9% to Rs 683, Tata Motors gained 3% to Rs 801, and Bajaj Auto rose 3% to Rs 2576. Mahindra & Mahindra rose 3.4% to Rs 781, after the company on Wednesday set a liberal interim dividend of Rs 7.50 per share for FY 2007. Bhel (up 6% to Rs 2231) was the to-gainer among Sensex constituents. The company is set to unveil its tentative FY 2007 (year ending 31 March 2007) results on 3 April 2007. Engineering & construction major L&T surged 5% to Rs 1579. The company is sitting on a strong order-book. Reliance Industries (RIL) gained nearly 3% to Rs 1378. Reliance Industries said on Thursday that Rohm and Haas Co, US, and itself were exploring joint construction of an acrylic-monomer plant in India. The proposed plant in Jamnagar will be able to produce 2 lakh tonnes of acrylic acid and its esters annually, RIL said in the statement. Products from the new firm will be used to make paints, packaging adhesives, detergents, textile and construction materials, RIL added But caution prevailed in cement shares. Grasim lost 1.2% to Rs 2080 and ACC shed 0.07% to Rs 752. Cement makers have reportedly turned down a request by the government to cut prices. A meeting was held today between the Finance Minister and cement makers, as the government wants cement makers to moderate prices in its efforts to combat inflation.[From internet]