Markets shrugged off inflationary worries and took a probable interest rate increase in its stride and the benchmark index, Sensex crossed 17,000 effortlessly on Friday.
It was sideways movement for the share indices in the morning session. But once the inflation numbers came out at noon, which was higher than last week's but lower than the high of 7.41 per cent seen two weeks ago markets latched on to good financial results announced by host of companies: Bharti, Idea Cellular, LIC Housing Finance to name a few. Post noon the Sensex showed clear uptrend closing for the day at 17,215, up 2.4 per cent (404 points) highest since February 29.
"Traders and investors, including FIIs (foreign institutional investors) took comfort from the statement of commerce minister Kamal Nath, that the government would try to rein in inflation in the next three months," said Anita Gandhi, head, institutional business, Arihant Capital Markets. So from inflation market attention to turned to earnings of companies, which so far has turned out be better than anticipated. Bharti was the chat topper as it moved from Rs 850-Rs 925, a gain of 9.6 per cent.
Financials too moved up smartly and IT stocks continued to enjoy the positive momentum gained since the Infosys results were announced. "It is a combination of factors. The volatility is reducing gradually. Results are better than what most analysts would have believed it would be. And the short positions are also getting covered," explained A Balasubramanian, CIO, Birla Sunlife Mutual Fund. Overall market participants say buying interest has emerged, but not sure whether one can say for sure how long the positive trend would continue.