Sensex logs best weekly gain in 2012

After dropping over 160 pts,Sensex staged remarkable recovery to close 70 pts higher at 16,718.87.

Written by Agencies | Mumbai | Published: June 8, 2012 5:10 pm

After dropping over 160 points due to weak global trends,the Sensex staged a smart recovery today to close 70 points higher– its fifth straight day of gains – and logged its best weekly gains this year by rising over 750 points or 4.72 per cent.

Market players attributed today’s recovery to resilient investor mood that continued to bet on a RBI rate cut shrugging off negative developments,including weaker rupee,Fitch’s downgrade of Spain’s credit rating and US Fed dashing hopes of a fresh stimulus even as Eurozone worries mounted.

Yesterday,global markets gained betting on monetary easing by global central banks but today they fell.

Indices in China,Hong Kong,Japan,South Korea,and Singapore fell by up to 2.09 per cent. European markets also declined as France,Germany and London were quoting lower by up to 1 per cent.

After opening lower,the BSE benchmark Sensex touched theday’s low of 16,485.02 points and moved in tandem with global trends.

It recovered in the last two hours of trade after RBI Deputy Governor K C Chakrabarty said: “If inflation comes down,definitely monetary policy rate will come down”.

The recovery was led by by a rise in stocks of capital goods,realty and fast moving consumer goods. Sensex finally closed 69.82 points higher at 16,718.87,a one-month high.

Meanwhile the rupee,which closed in the 54-level yesterday,weakened today and was trading at 55.50 levels after a touching a low of 55.70.

In the 30-share index,21 stocks closed higher led by gains in Sterlite,Gail and L&T. Heavyweights like ITC and Reliance which rose over 1 per cent also supported the rise.

“In the short term,the RBI rate decision will be keenly watched. The April IIP as well as the May Inflation data to be released next week may have a bearing on the policy,” said

Dipen Shah,Head Fundamental Research,Kotak Securities. Nifty also closed 18.70 points up at 5,068.35,after slipping below the 5,000-level.

Locally,all eyes are on the progress of monsoons. Globally,the election outcome in Greece (June 17) will be the major event to watch out for,dealers said.

Crude prices have softened and the Brent crude is below the USD 100 a barrel mark,which provides some cushion to the country’s finances and boost investor sentiments,they added.

Out of the Sensex constituents,major gainers were Sterlite Industries (3.5 pc),Gail India (3.06 pc),L&T (2.53 pc),BHEL (1.58 pc),HUL (1.36 pc),ITC (1.33 pc),DLF (1.24 pc),Reliance Industries (1.21 pc),Tata Power (1.13 pc),Bharti Airtel (1.08 pc) and Tata Motors (1.01 pc).

However,Maruti Suzuki today declined by 1.66 per cent,followed by Infosys (1.38 pc),ONGC (1.37 pc) and Bajaj Auto (1.06 pc).

Among the sectoral indices,the BSE-Capital Goods rose by 1.78 per cent,the BSE-Realty rose 1.40 per cent and the BSE-FMCG gained 0.89 per cent.

However,the BSE-IT index closed lower by 0.75 per cent.

The market breadth continued to show some positive trend as 1,371 shares finished with gains while 1,357 ended with losses.

The total turnover was down to Rs 1,970.93 crore from Rs 2176.65 crore yesterday.

“Investors would also keep an eye on Consumer Credit,Wholesale Inventories,Trade Balance to be released by the commerce department today evening in the US,” said Sharmila Joshi,Head Equity,Fairwealth Securities.

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