Markets shrug off inflation; Sensex gains 9% in week

Written by Markets Bureau | Mumbai, Mar 28 | Updated: Mar 30 2008, 04:32am hrs
The high inflation figure failed to dent the bourses on Friday with key indices making a recovery amid high volatility in the last half an hour of the trading session.

The 30-share Bombay Stock Exchange (BSE) Sensex ended the day at 16,371.29 points, surging 355.73 points or 2.22% while the National Stock Exchange (NSE) Nifty closed at 4,924 points, adding 111.75 points or 2.31%. On a weekly basis, the Sensex gained by more than 9% or 1,3376.46 points while the Nifty surged by 368.05 points or 8.04%.

Indias headline inflation rate for the week ended March 15 surged to a 59-week-high of 6.68% from 5.92% in the previous week, but positive news from other Asian and European markets balanced out the negative sentiments, dealers said.

Experts attributed these gains to the expiry of the derivatives contract on March 27 coupled with some positive news from the global markets.

Amitabh Chakravorty, president, equity, Religare Securities, said, Despite the rising inflation figures, markets ended in the green because of some value buying by the mutual funds in some quality stocks which were available cheap.

Also, data released in the US markets with respect to housing and employment on Wednesday were weak but well within expectations and that is the reason why other Asian markets were also up on Friday. Ahead of the quarter ending March, some MF players keep their NAVs healthy by resorting to buying heavy-weights at lower levels, so we might see some rally in the next few trading sessions also.

According to the provisional figures from the stock exchanges, foreign institutional investors were net sellers of Indian equities at Rs 401.95 crore while the domestic institutional investors were net buyers to the tune of Rs729.50 crore.

The overall markets breadth at the BSE remained highly positive on Friday with 2,333 stocks advancing against decline by 370 stocks and 39 remained unchanged.

All sectoral indices ended in the positive terrain with BSE metal, capital goods and IT surging by around 5% each followed by realty, power and consumer durables which gained around 4% each.