Andrew L D'Cunha
Mumbai, Oct 7: The BSE Sensex surged 443 points on the back of strong buying in blue chip stocks, in metal and banking stocks amid positive cues from global bourses. Sensex opened sharply high at 16,222.49 points, closed at 16,232.54 points, up 440.13 points or 2.79 percent from its previous close at 15,792.41 points. The Sensex touched a high of 16,347.48 points and low of 16,148.97 points in the intra-day.
The Nifty closed 2.83 percent higher at 4,885.70 points. Metal index surged 5.36 percent and Banking index advanced 3.82 percent. The European Central Bank’s move to boost liquidity in its banking system on Thursday coupled with a rally in US markets for three consecutive days saw the Nifty and the Sensex open with a huge gap up on Friday. Top gainers on the Sensex were Sterlite Industries up 8.56%, Jindal Steel up 8.22%, Tata Motors up 7.73%, ICICI Bank up 5.82% and DLF at Rs up 5.81%. Only one Sensex stock Bharti Airtel closed the day in the negative. Shares of Bharti Airtel witnessed profit booking on poor earning estates of June – September quarter.
Meanwhile, Indian food inflation rose to 9.41 per cent for the week ended September 24 on the back of costlier vegetables, fruits, milk and protein-based items. Food inflation, as measured by Wholesale Price Index (WPI), stood at 9.13 per cent in the previous week. The rate of price rise in food items was 16.88 per cent in the corresponding week of 2010.
As per data from the Ministry of Commerce; vegetables became dearer by 14.88 per cent year-on-year during the week under review, while potatoes and onions grew more expensive by 9.34 per cent and 10.58 per cent, respectively. Fruit prices went up by 11.72 per cent, while milk was up 10.35 per cent and eggs, meat and fish became 10.33 per cent more expensive. Inflation in non-food articles, which comprise fibres, oil seeds and minerals, stood at 10.77 per cent for the week ended September 24, as against 12.89 per cent in the previous week.
Asian markets witnessed fresh optimism and gained strongly on policy makers efforts to shore up its financial system and prevent another global banking crisis.. Hong Kong’s Hang Seng Index rallied 3.1%, Japan’s Nikkei climbed 1%, South Korea’s jumped 2.9%. Asia’s climb on Friday followed a strong performance for U.S. stocks Thursday/ Bank of England and the European Central Bank announced new easing measures which are expected to provide new life line to troubled eurozone. After two days rally, European stocks opened flat on Friday, as investors headed for the sidelines ahead of U.S. jobless data due later, while Royal Bank of Scotland Group PLC added to downside pressure after Moody’s Investors Service downgraded 12 U.K. financial institutions.
The Indian rupee was up by 44 paise at Rs 48.90 per US dollar in early trade today due to persistent selling of the American currency by banks and exporters amid a firming trend in the domestic equity market and dollar weakness in overseas markets. The rupee resumed higher at Rs 49.03/04 per dollar on the Interbank Foreign Exchange, as against its previous close of Rs 49.34/35 per dollar, and moved up further to Rs 48.90 per dollar. However rupee climbed down from its early high as the euro was unable to make fresh headway against the dollar. Indian rupee was at 49.16 per dollar while writing this report.
Stronger rupee limited the upside in prices of Gold in India as gold rose on Friday, extending gains for a third session. The most-active gold forr December delivery on the Multi Commodity Exchange (MCX) was 0.57 percent higher at 26,662 rupees per 10 grams, after gaining 2.3 percent in the previous two sessions. Physical buying continued as traders sought to stock for the upcoming festivals later in October.
Andrew L D'Cunha, managing director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com.