Decline in inflation and an expcted economic growth rate lifted sentiments in the stock markets. The 30-share Sensex of the Bombay Stock Exchange (BSE) gained 516.19 points, or 3.67%, before closing 14,564. 53 points on Friday. The broader S&P CNX Nifty of National Stock Exchange (NSE) added 146 points, or 3.46%, and ended at 4,360 points.
The Sensex opened on a strong note, at 14,279.02 points, on the back of positive cues from the Asian and European markets. The markets continued to extend its gains and neglected the slower GDP growth in the first quarter. The Indian economy slowed to 7.9% from 8.8% in the previous quarter. The Sensex rised a high of 14,586.16 points and a low of 14,279.02 points during the session.
Hitesh Agrawal, who heads research at Angel broking, said, ?An unexpected reduction in inflation figures led to a northward rally. It is too early to say inflation will not rise from here. We still expect inflation to touch 13.5%.? India?s inflation fell to 12.40% during the week ended August 16 as against 12.63% in the previous week.
The overall breadth of the market remained positive as out of 2,742 stocks traded on BSE, 1,851 stocks ended in green, 790 in red and 101 remained unchanged. While all the 30 stocks ended in green on Sensex. ?However, inflation has come down but crude oil prices are too volatile, which is a big concern. We can expect oil reaching $105-110 per barrel within a few months,? he said. The markets also witnessed huge buying in the interest-sensitive sectors like banking and realty. Viral Mehta, a dealer at Mehta Finstock (P) Ltd, said, ?The stocks which were badly hit in the past few days have again returned to their original prices. The markets also witnessed some genuine buying in the banking stocks.? All sectoral indices of the BSE ended the day in the positive terrain with banking and realty being the top-gainers.