A maturing market amid the mayhem
Sensex snaps 2-day fall; expiry watched
After gaining nearly 2 percent during trade, the benchmark index pared gains and closed just 80.5 points higher at 8902, as cuts in factory gate duty and service tax triggered short covering ahead of the expiry of monthly derivatives contracts.
The day belonged to auto and metal stocks, which appeared attractive on expectation the duty cuts on Tuesday will boost sales.
The BSE Auto Index closed 3 percent higher and the BSE Metal Index ended 1.2 percent up. Apollo Tyres, Tata Motors (trucks) and Ashok Leyland have slashed prices after yesterday’s announcement.
Banking stocks were firm on renewed hopes of an interest rate cut by the Reserve Bank soon. ICICI Bank, Karnataka Bank and Yes Bank were up in the range 1-2.68 percent.
Fraud-hit Satyam Computer Services rose nearly 3 percent to close at 45.05 rupees. SEBI has eased the norms for preferential allotment of shares by some companies, a move that should help Satyam find a strategic investor.
In the U.S., Federal Reserve Chairman Ben Bernanke on Tuesday said nationalization of big U.S. banks not at hand, bringing cheer to the market.
The slashing of factory gate duties and service tax appears to have driven the market up, but do you think the Sensex will be able to sustain the uptrend throughout the week, or will we see some volatility till the expiry of monthly derivatives?