News Column

Sensex bounces back on slew of positive factors

July 19, 2014

PTI



Mumbai: The S&P BSE benchmark Sensex recovered sharply by 617 points during the week on fresh buying mainly in Capital Goods, Metal, Banking and Power sectors on easing of infrastructure financial norms by Reserve Bank of India (RBI) coupled with easing of inflation figure.



Easing of inflation provided space for the Reserve bank of India to cut interest rates to revive economic growth.



Retail inflation in June touched its lowest mark at 7.31 per cent since January 2012 and the wholesale price-based index slid to four-month low of 5.43 per cent mainly because of easing vegetables prices.



The apex bank eased financing norms for infrastructure development and affordable housing, exempting long term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects, which boosted the shares from interest rates related segments.



Metal and mining counters too were in demand after a report showed that China's economy expanded in second quarter.



Revival of monsoon amid growth in merchandise exports in June 2014 and fall in global crude oil prices also kept the market tempo upbeat.



Country's exports grew by 10.22 per cent in June this year while imports rose by 8.33 per cent.



The Sensex open higher at 25,093.16 and hovered in a wide range of 24,892.00 and  25,713.40 before settling the week at 25,641.56, disclosing a sharp gain of 617.21 points or 2.47 per cent.



The CNX 50-share Nifty also rose by 204.30 points or 2.74 per cent to end at 7,663.90.

However, the market has been slightly affected on concerns over geopolitical tension after news that Malaysian airlines Jet downed at the Ukraine-Russia border.



"Quarterly results, especially from IT majors, were above estimates and improved sentiments," said Dipen Shah, Head-Private Client Group Research, Kotak Securities.

However, HUL 2.95 per cent, Bajaj Auto 2.28 per cent, Dr Reddy's Lab 2.24 per cent, Infosys 2.18 per cent and Gail India 2.02 per cent.



The small-cap and mid-cap indices of BSE also firmed up by 5.09 per cent and 4.25 per cent on good demand from retail investors and outperformed the benchmark Sensex.



Forex

The Indian rupee depreciated further by 35 paise to close at one-month low of 60.28 against the Greenback on sustained dollar demand from importers, despite smart recovery in local equities and sustained capital inflows.



At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly lower at 59.95 a dollar from last weekend's close of 59.93 and immediately touched a high of 59.90.



Later, it continued to rule under pressure and fell to a low of 60.46 before recovering some ground to settle the week at 60.28, still showing a fall of 35 paise or 0.58 per cent. Last week it has dipped by 21 paise or 0.35 per cent.



The benchmark S&P BSE Sensex this week spurted by 617.21 points or 2.47 per cent while FIIs infused $321.49 million on the first four days of the week as per Sebi data.

Pramit Brahmbhatt, Veracity Group chief executive officer said, "Rupee continued to trade on a weaker side and posted its second weekly loss in a row. On last trading day Rupee posted its lowest in one month, as early morning Malaysian airlines jet got hit by missile on the Ukraine-Russia border which shocked the whole world and dented the confidence of investors."




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Source: Times of Oman


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