Market review: GAAR delay, oil reforms spur market, Sensex scales 2-year peak
would enable OMCs to cut their under-recoveries, thereby reducing the burden of fiscal deficit of Government. It will also reduce the oil subsidy bill, where diesel accounts for 59 per cent of total subsidy.
Refinery counters like IOC, ONGC, BPCL, OIL, HPCL and RIL zoomed between 7.11 per cent and 22.83 per cent. As a result, the BSE-Oil&Gas flared up by 10.96 per cent and was the top gainer from the sectoral indices.
Drop in WPI-based inflation to a three-year low of 7.18 per cent in December also triggered buying in stocks.
Buying was so strong that stock markets ignored data showing that retail inflation rose to 10.56 per cent in December from 9.90 per cent in November.
Foreign Institutional Investors (FIIs), the main market driver, remained net buyers throughout the week, investing a net Rs 4,977.79 crore, including the provisional figure of January 18.
The market ended in the green on four out of five trading days. On Wednesday, it had dipped by 169 points as rate cut hopes were dented by RBI Governor D Subbarao's view that inflation is "still high".
The rally was also attributed to approval of 50 per cent reduction by the Government in reserve price of spectrum used by CDMA operators and good third quarter results announced by some major corporates.
Thirteen out of 30 Sensex scrips ended with gainswhile others finished with losses. Second-line counters, however, underperformed the sensex, indicating lack of any major retail investments. The BSE-Small cap index settled down by
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