Fall in food inflation raises hopes that RBI’s policy rate rise may be marginal.
Shrugging off weak global cues and selling by foreign funds, domestic investors bought banking and information technology stocks, helping the BSE benchmark Sensex recover over 68 points to 19,046.54, as fall in food inflation raised hopes that the Reserve Bank of India’s expected policy rate increase may only be marginal.
Sensex had lost about 114 points in the previous session. Fall in food inflation to 15.52 per cent for the week ended January 8, from 16.91 per cent in the preceding week, boosted the market sentiment. The BSE 30-share barometer resumed lower and remained in the negative terrain till afternoon trade, logging a low of 18,794.73. However, late buying, mainly in financial and IT stocks, lifted the Sensex to settle the day at 19,046.54, a net gain of 68.22 points or 0.36 per cent.
Similarly, the 50-issue Nifty of the National Stock Exchange also recouped by 20.55 points or 0.36 per cent to 5,711.60. There was strong buying in ICICI Bank, Infosys Tech, HDFC Bank, HDFC, Tata Consultancy Services (TCS) and State Bank of India (SBI).
Had it not been for the fall in Reliance Industries, ITC, ONGC and Bharti Airtel stocks, the rise would have been much more pronounced. Whereas banking and IT stocks were in the limelight, refinery and fast moving consumer good counters attracted profit-booking.
Foreign Institutional Investors resumed offloading and sold shares worth Rs 270.38 crore, while domestic funds bought shares worth Rs 488.53 crore yesterday as per the provisional figures.
Asian stocks, however, ended in the red with the key indices closing lower, between 0.43 per cent and 2.89 per cent, on concerns that China may go in for high interest rates following stronger than expected Chinese growth and record higher inflation. European markets displayed a feeble trend in the afternoon trade as well. The CAC was down by 0.08 per cent, the DAX by 0.05 per cent and the FTSE by 0.63 per cent.
Meanwhile, the government said the budget session of Parliament would begin on February 21 and the Union Budget is slated to be presented to Lok Sabha on February 28. From the Sensex pack, ICICI Bank shot up by 2.67 per cent, Jindal Steel 2.33 per cent, HDFC Bank 1.94 per cent, Reliance Com 1.72 per cent, TCS 1.53 per cent, HDFC 1.50 per cent, M&M 1.24 per cent, Infosys Tech 1.14 per cent, Tata Power by 1.12 per cent and SBI by 1.04 per cent.
However, ITC declined by 2.16 per cent, ONGC 2.02 per cent, Bajaj Auto 1.75 per cent, Reliance Ind 1.20 per cent and Bharti Airtel by 1.09 per cent. Amongst the sectoral indices, the Bankex spurted by 1.66 per cent and the BSE-IT by 1.13 per cent, while BSE-Oil&Gas dropped by 1.50 per cent and the BSE-FMCG by 1.19 per cent. The total market breadth turned negative as 1,416 shares ending with losses while 1,332 shares finishing with gains at BSE. The total turnover fell to Rs 3,347.16 crore from Rs 3,476.86 crore on Wednesday.
