Oil relief for bourses
With crude prices sliding for a third consecutive day, investors can expect an improvement in market sentiment as long as crude prices continue its downhill, reports HT Correspondent.business Updated: Jul 18, 2008 21:16 IST
Investors can expect an improvement in market sentiment as long as crude prices continue its downhill. Equities ignored a marginally higher rate of inflation and shot up on Friday as crude prices cooled off for a third consecutive day. The benchmark Sensex of the Bombay Stock Exchange jumped 523 points or 4 per cent to close at 13,635 points, while the Nifty of the National Stock Exchange gained 145 points or 3.7 per cent to end at 4,092 points.
While expectations that India will seal the nuclear deal with the US aided the market rally, short covering added base to it towards the latter part of the day as players who had sold shares or contracts that they did not own, bought them back in a hurry to minimise losses.
“Correction in crude prices has seen good buying appetite,” said Alex Mathews, head of research, Geojit Financial services.
The BSE Bankex firmed up by 8 per cent to gain the most among sectoral indices. It was followed by BSE Realty index (up 5.5 per cent) and PSU index (up 4.3 per cent). The BSE Metal and IT indices were the only once to close in red.
“If it were not for the vote of confidence, this is the time to buy aggressively because the reward-risk ratio is high,” said Rajesh Jain, Director and CEO, Pranav Securities. “If the government survives, one should be able to make about 25 per cent before the budget.”