Weekly review: Sensex rises 306 pts

Moody's also upgraded India's short- term foreign currency rating.

Weekly market review: Increased buying by foreign funds and expectations of cut in key interest rates by RBI in the forthcoming monetary policy review following a fall in food inflation pushed up the BSE benchmark Sensex by another 306 points this week.

Global rating agency Moody’s upgraded India’s short- term foreign currency rating from speculative to investment grade and raised the short-term country ceiling on foreign currency bank deposit from NP (not prime) to Prime (P-3),suggesting acceptable ability to repay short-term obligations,which further enhanced the sentiment.

Foreign Institutional Investors (FIIs) picked up shares worth Rs 1,440.50 crore during the week,including the provisional figure of January 13,as per the Sebi’s data.

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Firm global guidance,prompted by receding fears of deepening European debt crisis,also boosted the sentiment.

Successful Italian and Spanish bond auctions and remarks from the European Central Bank (ECB) President that the bloc’s debt markets seem to have stabilised,mainly lessened the concerns about the region’s debt crisis,which sent the global market upwards and had a positive rub-off on Indian bourses.

The 30-share Sensex resumed lower at 15,840.22,but recovered afterwards to five-week high of 16,257.34 before ending on Friday at 16,154.62,showing a net gain of 305.82 points,or 1.93 per cent.

The wide-based 50-issue Nifty of the NSE also shot up by 119.10 points,or 2.51 per cent,to end at 4,866.00.