Markets remain firm for 4th week; Sensex up 531 pts | business | Hindustan Times
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Markets remain firm for 4th week; Sensex up 531 pts

business Updated: Sep 21, 2013 17:18 IST

Despite last day selling due to RBI's repo rate hike, the S&P BSE benchmark Sensex continued to rule firm for the 4th consecutive week by surging 531 points to finish the week at 20,263.71 on good buying support after the US Federal Reserve decided to maintain its stimulus.

The Sensex resumed higher at 19,977.38 after Sebi eased investment norms for overseas entities in government debt, but weighed down as inflation soared to a six-month high and closed nearly flat on Monday.

Inflation, as measured by the wholesale price index, came in at 6.1% in August compared with 5.79% in July, the highest level since February.

The Sensex rallied to almost 3-year high to 20,739.69 on Thursday after the US Federal Reserve unexpectedly left its stimulus programme unchanged, easing fears of capital outflows. The decision may attract investments in most emerging markets, including India, this year.

However, the Sensex fell on profit-booking from operators on the last day of the week to end sharply higher by 530.95 points or 2.69% at 20,263.71 from 19,732.76 last weekend after RBI governor Raghuram Rajan on Friday unexpectedly raised a key interest rate to combat inflation and partially rolled back liquidity tightening measures.

The RBI raised the short-term policy repo rate to 7.5% from 7.25%, saying inflation had to be lowered to more tolerable levels. The move may increase interest rates on home and auto loans.