Despite last day selling due to RBI's repo rate hike, the S&P BSE benchmark Sensex continued to rule firm for the 4th consecutive week by surging 531 points to finish the week at 20,263.71 on good buying support after the US Federal Reserve decided to maintain its stimulus.
The Sensex resumed higher at 19,977.38 after SEBI eased investment norms for overseas entities in government debt, but weighed down as inflation soared to a six-month high and closed nearly flat on Monday.
Inflation, as measured by the wholesale price index, came in at 6.1 per cent in August compared with 5.79 per cent in July, the highest level since February.
The Sensex rallied to almost 3-year high to 20,739.69 on Thursday after the US Federal Reserve unexpectedly left its stimulus programme unchanged, easing fears of capital outflows. The decision may attract investments in most emerging markets, including India, this year.
However, the Sensex fell on profit-booking from operators on the last day of the week to end sharply higher by 530.95 points or 2.69 per cent at 20,263.71 from 19,732.76 last weekend after RBI Governor Raghuram Rajan on Friday unexpectedly raised a key interest rate to combat inflation and partially rolled back liquidity tightening measures.
The RBI raised the short-term policy repo rate to 7.5 per cent from 7.25 per cent, saying inflation had to be lowered to more tolerable levels. The move may increase interest rates on home and auto loans.
To ease liquidity, the marginal standing facility rate, at which banks borrow from the RBI, was cut to 9.5 per cent from 10.25 per cent and the minimum daily maintenance of the cash reserve ratio was lowered to 95 per cent.
The Sensex has gained by 1,744.27 points of 9.42 per cent during the four weeks.
The NSE 50-share Nifty also rose by 161.50 points or 2.76 per cent to 6,012.10 from last weekend's close of 5,850.60. It has also gained by 540.35 points or 9.88 per cent in the four weeks.
Foreign Institutional Investors continued their buying spree by investing net Rs 5,694.96 crs during week including the provisional figure of September 20.
23 scrips out of the 30-share Sensex pack ended in green while remaining seven finished in red.
Major gainers from the Sensex pack were Maruti Suzuki (11.01 pct), Gail India (8.70 pct), Jindal Steel (8.05 cpt), ITC (7.19 pct), Bharti Airtel (5.69 pct), M&M (5.15 pct), SBI (5.03 pct), Tata Power (4.98 pct), Dr Reddy's Lab (4.91 pct), NTPC (4.82 pct), Icici Bank (4.97 pct), HUL (4.79 pct), HDFC Bank (4.74 pct), Wipro (4.38 pct), Coal India (2.71 pct), ONGC (2.69 pct), RIL (1.07 pct) and Tata Motors (1.60 pct).
However, BHEL dropped by 4.99 pct followed by Hero Moto copr 3.42 pct, Sesa Goa 2.99 pct, Cipla 2.45 pct, Infosys 0.93 pct and Bajaj Auto 0.53 pct.
Among sectoral indices, S&P BSE-Bankex shot up by 4.99 pct, S&P BSE-FMCG 4.60 pct, S&P BSE-Auto 2.38 pct, S&P BSE-Metal 2.37 pct, S&P BSE-PSU 2.34 pct, S&P BSE-Power 2.16 pct, S&P BSE-Oil&Gas 1.97 pct and S&P BSE-CD 1.22 pct while S&P BSE-Realty dropped by 2.37 pct and S&P BSE-HC 0.51 pct.
Total turnover at BSE and NSE rose to Rs 10,307.45 crs and Rs 66,173.74 crs respectively as against the previous week level of Rs 9,343.92 crores and Rs 52,934.76 crore.