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Profit taking caps Sensex rise

February 4, 2009

For the second day in a row, the Sensex registered small gains after a volatile session.

A surge in Asian markets helped the benchmark add over 2 percent by late morning, but the gains could not be sustained and the index ended marginally higher at 9202 as investors booked profits in stocks such as Reliance Industries.

Sectorally, the metals index was the best performer, ending 3 percent higher. Stocks like Ispat Industries jumped over 12.4 percent, while Tata Steel gained 4.9 percent.

Prominent among the other Sensex gainers were DLF and JP Associates which rose 5.1 and 4.6 percent respectively. Mahindra & Mahindra and Ranbaxy Labs were on the losing side of the index.

The realty index, which was beaten down in the last two trading sessions, witnessed a recovery of 1.18 percent.

Shares in fraud-hit Satyam fell for the second straight day, ending down 6.7 percent at 50.1 rupees. It was the top traded stock on the BSE and NSE with volumes of over 75 million shares.

An obvious answer to what can help the Sensex sustain its gains is a pickup in demand for goods and another round of rate cuts by the Reserve Bank. A top policy advisor today said the RBI may cut interest rates after February’s interim budget is approved and it has a better sense of the country’s fiscal situation. Do you think the market sentiment will improve significantly if the RBI actually slashes rates?

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