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Buying interest gained momentum during the closing hours of the day and as a consequence, indices in the Indian stock market shut shop on a very strong note. Today's strong performance enabled the BSE-Sensex to go past the 17,000 mark yet again. The index finally settled around 380 points higher than the previous closing. NSE-Nifty also witnessed strong gains in the region of around 120 points (up 2.3%). Although BSE Mid Cap and BSE Small Cap indices also edged higher, the gains were lower than their bigger counterparts and came in at around 1% each. Only two stocks from the Sensex closed the day in the negative.

The rupee was trading at Rs 47.9 to the U.S. dollar at the time of writing. While most Asian indices closed higher today, Europe too is witnessing a positive trend currently.

Export-dependent large caps like Reliance Industries and tech stocks as well as banking stocks were the leaders of today's rally. With rupee depreciating to much as Rs 47.9 to the dollar, expectations of higher profits for companies that earn a significant part of their revenues in US dollars seemed to have driven these stocks higher today.

As for the catalyst, it seemingly came from a statement by the RBI deputy governor that the interest rate cycle in India is nearing its peak, and should reverse by the end of this year. These examples go to show how reversion to the mean is the iron rule of financial markets and hence, selling based on some near term negative development is not the way to go for a long term investor. For all things, no matter how bad, do come to an end.

BGR Energy Ltd, one of India's leading Engineering Procurement & Construction firms, traded strong on the bourses today and closed higher by more than 1%. Besides overall market sentiment, the optimism behind the counter also seemed a result of reports doing the rounds that the firm is about to close a deal for entering into the solar power industry with a Germany-based firm. The German firm, Flagsol, is the subsidiary of Solar Millennium, also Germany-based. The deal involves a JV where BGR will hold a 60% stake.

It should be noted that the JV is looking to set up a 50 MW concentrated solar power plant in Rajasthan. The plant of that size would call for an investment of about Rs 6.5 billion. This news comes close on the heels of another positive development whereby BGR emerged as the lowest bidder in the tender called by NTPC for supply of nine units of 800 MW steam turbine and generator units for a value of about Rs 35 billion.

Another scrip that closed in the positive territory was that of watch and jewelry maker Titan Industries. The stock ended 2% higher, buoyed by the overall positive sentiment and also on the back of news that the firm is planning to open 2 to 3 new Goldplus stores this year which will take the overall number to 31/32 this year. The company normally adds 12 stores for premium jewellery brand Tanishq and 40 stores for the World of Titan showroom. It is aiming to record revenues to the tune of Rs 90 billion for the current fiscal year. For the forthcoming holiday season, Titan is aiming for 25% to 30% sales growth.

Source: India Markets Tuesday Wrap-Up: Sensex Reclaims 17K