Markets recover, Sensex up 4.17 pts

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Shrugging off sustained rise in inflation and high global crude oil prices, the benchmark Sensex recovered major part of its last week's losses and closed up by 4.17 per cent during the week under review.

A healthy infrastructure growth number to 9.6 per cent in March, which was less than the preceding period but above market expectations, higher than overall industrial growth of three per cent mainly injected much needed confidence in the investors mind.

As a result, capital goods, cement and steel counters attracted good buying support and ended with smart gains.

IT counters also were in keen demand on the back of sustained weakness in the rupee to over 13-month low, which might boost the bottomline of these companies.

In the week to May 17, the Bombay Stock Exchange (BSE) barometer moved in a wide range of 17,497.36 and 16,546.55 before concluding the week at 17,434.94, a net rise of 697.87 points over the last close of 6,737.07.

Similarly, the 50-issue Nifty of the National Stock Exchange (NSE) also recovered by 175.10 points or 3.51 per cent to end the week at 5,157.70 from previous weekend's close of 4,982.60.

Despite government's several fiscal and monetary measures and also by the Reserve Bank of India in the past few weeks, inflation spiralled upwards to nearly 3-1/2 year high of 7.83 per cent for the week ended May 3, 2008, the highest since November 6, 2004.

Global crude oil prices also touched a new peak of USD 126.98 a barrel on Thursday before easing to near USD 125 a barrel in New York.

Despite higher inflation, Foreign Institutional Investors (FIIs) remained net buyers in last few days and partly aided the recovery in the Sensex.

According to analysts, the market is at the crucial stage near the most important long term 200-day moving average and expected side-ways movements in line with the global as well as local news.

In the week under review, led by Metal and IT segment, all other sectoral indices ended in positive terrain with an average gain of 0.6 per cent to 5.5 per cent.

The BSE-Metal index flared up by 1,447.32 points or 9.27 per cent to 17,058.01 and the BSE-IT index by 232.31 points or 5.49 per cent to 4,467.55.