A maturing market amid the mayhem
Sensex ends flat in choppy trade
The Sensex jumped nearly 50 points on Friday to end at 10,048.49, driven mostly by increasing optimism worldwide.
Gains however were capped by profit-booking in a market that has recovered considerable ground after Satyam unveiled the country’s biggest corporate fraud in early January.
The rally was led mostly by metals (index up 4.8 percent), health care (index up 2.8 percent), banking (index up 2.6 percent) and auto stocks (index up 2.2 percent).
The government has set a record gross borrowing target of 3.62 trillion rupees ($71 billion) for the year to March 2010. But increased borrowing is likely to impact interest rates as an increase in demand will edge interest rates higher.
Heavy selling was seen in index heavyweights Reliance Industries and Infosys Technologies.
The top gainers included Tata Steel (up 9.1 percent), Tata Motors (up 9.3 percent), Reliance Communication (up 8.9 percent) and Hindalco (up 5.2 percent).
The metals sector saw good activity, with JSW Steel (up 13.7 percent), Sesa Goa (up 9.8 percent) and Tata Steel (up 9.1 percent) sending the BSE Power Index higher by over 4.8 percent.
Renewed FII interest in Indian shares has boosted confidence. Data shows FIIs bought almost $620 million worth of shares by mid-March on hopes of a recovery in the global economy.
The 50-share NSE index ended 0.86 percent up at 3,108.65, after touching the day’s high of 3,123.35.
Asian markets saw a mixed response from investors. Britain’s economy slowed more than expected, shrinking by 1.6 percent in the fourth quarter – its sharpest decline since 1980. Global recession has clouded Japan as it slipped to the brink of deflation and inflation in Europe hit close to zero.
Investor sentiment is likely to see some buoyancy with the Sensex closing above the 10,000 mark for two days in a row. But is the feel good factor in the market strong enough to keep the Sensex in five digits when the last quarter earnings season kicks off in April?