Market flourishes, sensex up 196.66 points
Shares posted the biggest weekly gain since early March, as they climbed 1.2 percent on Friday, joining a global markets rally triggered by bargain hunting after China's assurance that Europe will remain a major investment market.business Updated: May 29, 2010 01:40 IST
Shares posted the biggest weekly gain since early March, as they climbed 1.2 percent on Friday, joining a global markets rally triggered by bargain hunting after China's assurance that Europe will remain a major investment market.
The 50-share NSE index gained 1.3 percent to 5,066.55. Global equities measured by the MSCI All-Country World Index advanced 0.9 percent, gaining for the third consecutive day.
Metal makers Tata Steel, Hindalco and Sterlite Industries gained the most, driven by firm metal prices in London as copper prices touched a two-week high.
The 30-share BSE index rose 1.18 percent or 196.66 points, and reached 16,863.06 points. It rose 2.5 percent this week, the most since the week ended March 6, when it registered a 3.6 pct gain.
Twenty six components of the index closed in the green. However, the benchmark is down nearly 4 percent in May and is set to post its first monthly loss since January, as foreign funds pulled out $2.3 billion from Indian equities this month.
"The bad news was overdone. The Europe debt woes are more than factored in," said Neeraj Dewan, director of Quantum Securities, ruling out any steep downside from current levels.
Foreign funds are still net investors of $4.3 billion since January, after record inflows of $17.5 billion in 2009 that led to a spectacular 81 percent rally in the benchmark last year. The BSE Sensex has fared better than its peers such as China's Shanghai Composite Index, which dipped 7.5 percent in May and Brazil's Bovespa stock index, which shed 8.1 percent.
"Monsoon is a key factor to watch now. A lot depends on that," said Quantum Securities' Neeraj Dewan.Investors are keenly awaiting the June-September monsoon, which is vital for farm output, rural incomes and is a key driver of demand for a wide range of manufactured goods.
The annual monsoon, halted by cyclone Laila last week, is likely to hit the country's southern coast on schedule in the next three to four days, weather officials said on Thursday. Last year, India suffered its worst drought since 1972, despite a forecast for a normal monsoon.