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Stocks hit 3 year high on China data

Mumbai, Oct 18 (): Stocks in the BSE Sensex for the first time in three years rose by over 2 per cent today. For the first time in two months, the rupee slipped to below 61 for a dollar. Nifty went past the 6,150 levels.

Indian markets reacted to Asian indices, which topped a five-month high on the China data which showed the economy grew at the fastest pace in the third quarter.

Analysts say that Indian markets would be dictated by global situation and the local political environment that develops out in the near term. It looks like both the developments would be only be better, feel analysts.

China’s strong growth data led to investors buying in metal stocks. Stocks of Sesa Sterlite shares rose by nearly 8 per cent to be at the top the 50-share Nifty. Tata Steel went up by 6 per cent, which also saw buying interest.

After several days, Hindalco shares rose. The aluminium manufacturer and its owner Kumar Mangalam Birla have been named in the CBI FIR in the coal scam.

Bank stocks of IndusInd Bank (5 per cent) and Axis Bank (4.2 per cent) were among the top gainers in Nifty today. Private bank stocks of ICICI Bank, the biggest private lender, sold at 3.5 per cent higher.

Analysts could not explain the rise in banking stocks before the Reserve Bank policy review due in October. The RBI is widely expected to hike repo rate, in a bid to control inflation for the second straight time in two months.

Stock Brokers feel that the weak WPI and CPI data will make it difficult to trade in bank stocks. One can expect volatility in bank stocks, many feel.

The US crisis has been blown over and so bond yields are not likely to improve there and will ease money coming in to India seen as an emerging market.

The Federal Reserve move to delay the tapering of its stimulus, will help Indian stocks and rupee.

The rupee pulled below 61 per dollar for the first time in over two months in the morning, but the rally was short-lived on reports that the RBI is planning to close the dollar swap window facility given to oil companies. To stop rupee decline, RBI opened the dollar window for oil marketing companies.