Markets continue rally as bank stocks surge

The day belonged to bank stocks, mostly of smaller banks, as the government decision to modify the regulations governing voting rights in banks set them on fire.

Global cues were also very strong after the strong rally in US markets yesterday. Markets seem to have started taking the volatility in oil prices more lightly as the marginal impact of higher prices is not perceived as too worrying.

The indices opened with a large positive gap from yesterdays closing and maintained the gradual build up till late in the afternoon. Some amount of profit booking in the last half hour saw the indices coming down from the highs of the day. Volumes continue to be on the lower side.

The Sensex closed at 6360, up 70 points and the Nifty at 1963, up 20 points. Nifty May futures discount to the spot index widened to 14 points from yesterday's 10 points.

Among Nifty stocks, L&T, Ranbaxy and Dr Reddy's were the major percentage gainers while Oriental Bank of Commerce, Gujarat Ambuja and HDFC were the major losers.

US markets were reassured yesterday by the statements from Fed Reserve confirming its stand on gradual increases in interest rates. The news about billionaire-investor Kirk Kerkorian increasing his stake in General Motors cheered the markets. GM had come under severe selling pressure as the company is facing serious difficulties in maintaining market share. Both Dow and NASDAQ gained well over a per cent each.