RTTNews - Robust manufacturing growth, aggressive tax reform proposals unveiled as part of a new direct tax code by finance minister Pranab Mukherjee and comments from the U.S. Federal Reserve that the world's largest economy is leveling out, lifted the Indian market sharply higher on Thursday after recent losses.

Investors largely shrugged off reports that the country's monsoon rainfall deficit has widened further to 29% as on 10 August 2009.

Meanwhile, India's annual inflation rate showed a negative growth for the ninth week in a row, declining 1.74 percent for the week ended August 1 from 1.58 percent fall in the week before, government data showed on Thursday.

The BSE Sensex opened higher at 15,208 and rose to a high of 15,545 before finishing at 15,518, up nearly 500 points or 3.32% and the S&P CNX Nifty rose 147 points or 3.31% to 4,605.

On the BSE, the broader market outperformed large-caps, with the BSE small-cap index jumping 4.1% and the mid-cap index by 3.59%. Gainers outnumbered losers by 2214 to 519 and 61 stocks closed unchanged.

Sector-wise, the realty index jumped 6.86%, the metal index rallied 5.57% and the auto index by 4.41%. Banking, capital goods and FMCG stocks also ended with impressive gains, while IT healthcare and oil/gas stocks showed modest gains.

Stock-wise, DLF(up 7.21%), ICICI Bank(up 6.53%), Maruti Suzuki(up 6.41%), Tata Steel(up 6.04%), Tata Motors(up 5.86%), Sterlite Industries(up 5.81%), SBI(up 5.68%), Larsen & Toubro(up 5.20%), ITC(up 5.15%), Hindalco(up 4.93%) and Hero Honda Motors(up 4.78%) were the top gainers. Among Sensex constituents, all 30 stocks ended in positive territory.

Pantaloon Retail fell 1.39% on reports that it is witnessing as much as 20% fall in sales at its Pune and Mumbai stores in view of the panic caused by swine flu. Inducto Steel advanced 3.55% after it purchased a Panamax bulk carrier ship from Baltanas Shipping Charlestown, Nevis for $ 2.78 million for ship breaking activity.

Aviation stocks jumped after Civil Aviation Minister Praful Patel said that the Prime Minister has agreed to form a panel to look into the woes of the aviation sector. Kingfisher surged up 6.12%, Jet Airways rallied 3.91% and SpiceJet climbed nearly 11%.

Phoenix Mills advanced 4.62% on reports that its partner firm Entertainment World Developers is planning a Rs.500-crore IPO by the year-end. Dalmia Cement added 4.18% on reports that it has firmed up expansion plans.

Tech Mahindra rose 2.07% after it enhanced its presence in Northern India by setting up a fully owned facility in Chandigarh. TTK Prestige soared 5.67% after it unveiled plans to establish a new industrial unit at Robrkee, Uttarakhand for manufacture/assembly of domestic kitchen electrical appliances & stoves.

Sun TV Network gained 3.38% after it denied media reports that it is discussions for an aviation joint venture with a Dubai-based company. Dr Reddy's Laboratories edged up 0.89% after it launched Strea Professional, the company's first product in the non-invasive aesthetics segment in India.

Prime Securities hit the 5% upper circuit limit after it announced the cancellation of six lakh convertible warrants as none of the warrant holders have exercised the option to convert the warrants into equity shares.

Jammu & Kashmir Bank rallied 5.77% after Reliance Infrastructure Fund bought 8.16 lakh shares of the bank from Smallcap World Fund at Rs.450.10 per share. Western India Shipyard was locked at the 5% upper circuit limit after it received a ship repair order worth Rs.6.60 crore from Dredging Corporation of India.

Everonn Systems soared 6.75% after it bagged a Rs 91.87 crore contract from the government of Uttar Pradesh. Likewise, PSL surged up 11.32% on bagging a Rs. 500 crore order from Gail India and Pratibha Industries hit the 10% upper circuit limit on receipt of a new contract worth Rs 523.40 crore from National Building Construction Corporation for the construction of a medical college at Patna.

Oil explorer Reliance Industries rose 1.59%, ONGC gained 2.99% and Cairn India added 1.79% after crude oil futures for September delivery rose above $71 a barrel in Asian trading.

Elsewhere, optimism that the U.S. economy was through the worst of the recession lifted the other Asian markets sharply higher, European stocks advanced for the second straight day after data showed France and Germany returned to economic growth and U.S. stock futures point towards a positive opening on Wall Street Thursday ahead of the release of key economic data on productivity and labour costs.

For comments and feedback: contact editorial@rttnews.com