Sensex makes a comeback, settles at 14,500

Mumbai, May 29 | Updated: May 30 2007, 05:30am hrs
After opening the day on a volatile note, markets in the final hours of trade made a strong comeback to close the day above the 14,500 mark. Supported by strong Asian markets, the 30-share Sensex of the Bombay Stock Exchange (BSE) gained 110.32 points or 0.77% to close at 14, 508.21. Meanwhile, the broader index S&P CNX Nifty of the National Stock Exchange (NSE) was also up by 36.70 points or 0.86% to close at 4,293.25.

Top performers of the day were Cipla, up 4.95%, BHEL (4.86%), L&T (4%) and Ranbaxy Laboratories (2.17%). Index major Reliance Industries also saw sharp gains. It was up by 1.85%.

While the BSE Mid-Cap index gained 0.77% or 47.81points at 6, 254.51, the Small-Cap index was up by 0.73% or 53.69 points to close at 7,388.33.

Going forward, analysts believe that, volatility is expected to remain high on account of futures and options (F&O) expiries of May 2007 derivatives contracts on May 31.

However, finance minister P Chidambaram on Tuesday said that he intended to bring down inflation to 4-4.5%, urging states to maintain adequate supplies of food for ensuring price stability. This, market watchers believe, may directly or indirectly build another interest rate hike.

Analysts are closely watching crude oil prices, which bounced back to $70 per barrel in London on Tuesday due to concerns over Nigerian crude production at the beginning of the summer driving season in the US. A petro product hike will be viewed negatively by the market as it would stoke inflationary fires.

However, Gaurang Shah, VP-portfolio, Geojit Financial Services, believes that if this weeks inflation figures are down near 5-10% then there would be no need for the RBI to hike interest rates. He stated that a rising rupee, on the other hand, had become a bigger concern. It is mainly affecting IT and export oriented companies. Currently, the market breadth remains steady. On Tuesday, 50.79% shares (1357) advanced as against the 45.40% (1213) that declined.

The share price of around 3.82% stocks (102) remained unchanged.

In the Asian markets category Nikkei rose 0.48% as Sanyo Electric Co surged after posting strong earnings and Chinas Shanghai Composite too was up by 1.47%.