Andrew L D'Cunha
Mumbai, Sep 29: Indian markets ignored weak global cues and high inflation numbers and closed near days high today. The BSE Sensex closed the day in green gaining 252 points or 1.53 percentage points to close at 16,698. Nifty regained the psychological 5000 level and closed at 5015 gaining 70 points or 1.4% percentage.
Amongst the sectoral indices, BSE Auto index was up 2.1 per cent, BSE IT index gained 2.08 per cent and BSE FMCG index closed 1.6 per cent higher.
Heavyweight Infosys shot up 3.4%, to close above Rs 2,500; the stock has seen smart recovery from August lows of near Rs 2000 level. From the oil & gas space, ONGC and Reliance Industries rose 2.2% and 1.3%, respectively. Private financial space too was quite supportive. HDFC Bank, ICICI Bank, Kotak Mahindra Bank and HDFC moved up 2.5-3%. From the auto pack, Tata Motors, M&M, Hero Motocorp, Bajaj Auto and Maruti Suzuki gained 1.5-3%. ITC and HUL surged 2.6% each.
Earlier in the day, the Sensex opened in the red and succumbed to selling pressure due to nervousness over Euro-zone bail-out plan. The index changed tracks and rallied in the second half of the day due to short covering on expectations of positive news from Europe. The Nifty touched a high of 5,034 in the last leg of the trade, just before the announcement by Germany on the bailout vote.
Asian equities started on a weak note on Thursday. South Korean shares gained sharply on Thursday in Asia and Japanese shares moved off early lows, following a volatile session. South Korea’s Kospi jumped 2.7%, while Japan’s Nikkei ended the day with a 1% gain,
Food Inflation Rises again
Food inflation jumped to 9.13% for the week ended September 17 from 8.84% in the previous week, mainly due to a rise in prices of potatoes, pulses and poultry. In the previous week, annual food and fuel inflation stood at 8.84% and 13.96%, respectively. The primary articles index was up 11.43%, compared with an annual rise of 12.17% a week earlier. Finance Minister Pranab Mukherjee termed the rise in food inflation as an area of "grave concern". WPI-based inflation in August accelerated to 9.78%, its highest in more than a year, from 9.22% recorded for July.
The RBI has raised interest rates a dozen times in the past 18 months, but headline inflation WPI (wholesale price index) remains at more than twice the bank’s comfort level, confounding expectations that it was coming to the end of its tightening cycle.
Gold and Silver down
Gold and silver moved down in the bullion market today due to reduced offtake by stockists and jewellery makers influenced by weak global trend. While gold plunged by Rs 500 to Rs 26,440 per 10 grams, silver lost Rs 1,700 to Rs 53,500 per kg on sluggish demand. Gold in global markets, which normally sets the price trend on the domestic front, recorded a sharp fall of USD 40 to USD 1,609.70 an ounce and silver by 6.12 per cent to USD 29.93 an ounce in New York last night.
Andrew L D Cunha, Managing Director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com