Sensex gains 47 pts on global cues, dip in food inflation
Cutting short two days of successive losses, the BSE benchmark Sensex today recovered partially and ended 47 points higher on strong global cues and a further dip in food inflation.business Updated: Aug 26, 2010 18:38 IST
Cutting short two days of successive losses, the BSE benchmark Sensex on Thursday recovered partially and ended 47 points higher on strong global cues and a further dip in food inflation.
Helped by smart buying in FMCG, power, financial and auto stocks, the Bombay Stock Exchange's 30-share benchmark closed at 18,226.35, up 46.71 points, or 0.26 per cent. In the last two sessions, the Sensex had lost nearly 230 points.
As expected by the marketmen, trading on Dalal Street was choppy, with today being the settlement day for derivative contracts. The wide-based 50-share Nifty Index of the National Stock Exchange finished at 5,477.90, up 0.28 per cent.
Gaining strength from positive cues from Asian peers, the Sensex edged higher at the onset of trading and a sharp rise was witnessed in afternoon trade as European indices opened in the green. The Sensex moved between a high of 18,261.06 and a low of 18,159.13.
"Domestic market is behaving in the tune of global peers and positive sentiment from overseas, coupled with ease in the food inflation, helped local bourses to end in the green," SMC Global Securities V-P and Research Head Rajesh Jain said.
Food inflation moderated for the second straight week in mid-August to 10.05 per cent as against 10.35 per cent in the previous week as vegetables turned cheaper.
A further drop in food inflation triggered buying in rate sensitive stocks like banking, realty and auto, as investors felt that such a decline will ease pressure on the Reserve Bank to follow any tight monetary policy.
Realty major DLF climbed 2.14 per cent, HDFC 1.3 per cent and State Bank of India 1.47 per cent. ICICI Bank rose 0.2 per cent, while HDFC Bank ended with a loss of 0.74 per cent.
State-run power major NTPC surged 2.22 per cent and was the best performer in the Sensex pack. Tata Power, too, rose by 1.07 per cent.
"While the global economic situation would take some time to mend itself completely, in the meanwhile, emerging growth markets like India provide ample opportunities to long-term investors to do some bargain hunting in times of corrections," brokerage house Reliance Securities said.
Tata Motors rose 0.59 per cent after the auto major said it is looking to raise up to USD 1 billion (around Rs 4,700 crore) to fund its various expansion programmes.
Buying interest was also visible on the M&M counter. The stock rose 0.67 per cent after the utility vehicle major said it is looking to enhance production of its two-wheelers within the next 2-3 years.
However, Reliance Industries, which carries the maximum weight in the Sensex, continued its falling journey and lost 1.18 per cent to settle at Rs 956.70. The company has raised loan worth USD 1 billion from various banks, according to market sources.