Street Revels in Happy Tidings Across Sectors

Sensex jumps 465 points to 18,816 while Nifty zooms 132 points to 2-month high of 5,654

The finance ministry took short-sellers by surprise on Friday as a senior bureaucrat talked up financial markets by announcing a lower-than-expected government borrowing target for the first half of 2011-2012.
Betting on more bad news like debt distress in Europe and spiralling oil prices, operators on Dalal Street had retained their short positions on Thursday. Indeed, they were emboldened after rating agency S&P cut Portugal's debt ratings. But what threw them off gear Friday morning was the borrowing number.
While treasury economists fear higher oil prices, more subsidy and slower divestment could push up government borrowing later in the year, traders took no chance. As they rushed to cover their positions, benchmark indices rose for the fourth straight day.
Accenture, the world's second-largest technology-consulting company, further improved market sentiment as it raised sales forecast for this quarter, exceeding analysts' estimates. Shares of software exporters, including Infosys Technologies and Tata Consultancy Services, led the rally after Accenture's improved revenue guidance sparked hopes of better earnings forecasts by domestic peers.
Bank stocks, which have a significant weightage in the indices, also rose amid hopes that banks will end March 31 with a lower mark-to-market loss in their portfolio of government and corporate bonds. BSE's 30-share Sensex rose 464.90 points, or 2.53%, to 18,815.64. NSE's 50-share Nifty gained 131.85 points, or 2.39%, to 5,654.25. Gainers outnumbered losers 1,727:1,199 on BSE.
Why did Sensex gain despite rising oil prices
Outlook for software cos, immune to oil prices, brightened with Oracle and Accenture beating revenue, profit estimates. Upward revision of Q4 US GDP growth could boost tech services price
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What contributed to gains
Infy alone was responsible for nearly a fifth of Sensex gains. All other sectors gained about 2% when BSE IT rose 4%
How did the rest of the global markets behave
MSCI Emerging Markets Index rose 0.7% and Asian stocks also gained on likely Japan reconstruction demand
How does India stack up now in the region
Sensex still worst performer in Asia as investors cautious that inflation could cripple demand
Are valuations attractive among BRIC nations
Still the most expensive at 17.7 times future year earnings vs 10.7 for Brazil; 7.4 for Russia and 13.98 for China
Will global investors continue to buy
Yes, since cos they are buying into will deliver in long run Biggest Weekly Gain This Year
Both benchmarks gained 5.2% this week, their biggest weekly gain so far in 2011. The announcement by economic affairs secretary R Gopalan sparked a rally in the bond market, which assumed there will be a lower issuance of government bonds in 2011-12. Gopalan said India will meet 60% of its 2011-12 borrowing target by September end.
Some fund managers said the recent market strength, despite high oil prices, has traders believing that most of the recent pessimism is baked into share prices. "A lot of the negatives have been factored into the market after the recent correction," said Sandip Sabharwal, of Prabhudas Lilladher..