Markets bounce back on recovery signs in global economy

Markets bounce back on recovery signs in global economy
PTI
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First Published: Sat, Jul 18 2009. 12 55 PM IST
Updated: Sat, Jul 18 2009. 12 55 PM IST
Mumbai: Stronger global cues and optimism about encouraging corporate earnings, in addition to revival of the monsoon helped the markets recover their post-budget losses with over 9% jump in key indices.
The Bombay Stock Exchange (BSE) ended the week up 1,240.70 points or 9.19% at a two-week high of 14,744.92 points from its previous week’s close.
Similarly, the National Stock Exchange’s (NSE) 50-share Nifty also rebounded by 371.05 points or 9.27% to close the week ended 18 July at 4,374.95 points.
Both the Sensex and the Nifty had fallen by nearly 9.5% each after the Budget disappointed investors by not announcing any big-bang reforms.
During the week, global markets remained upbeat on signs of recovery in the economy and a positive beginning of the US earnings season. The US retail sales showed growth for the second consecutive month.
Renowned economist Nouriel Roubini said the worst of the financial crisis is over and the US economy is no longer in a stage of a free fall.
On the domestic front, the markets also drew support on hopes of improvement in the Q1 margins of India Inc despite slower revenue growth.
After Infosys Technologies and HDFC Bank, IT major TCS beat the market expectations by posting 19% growth in their net profit for the first quarter.
The market sentiment was further boosted by finance secretary Ashok Chawla’s statement that the finance ministry will introduce seven bills in Parliament, including proposals for pension and banking reforms.
Analysts opined that the market is bullish and the flow of encouraging corporate results and news about economic recovery could trigger short covering in derivatives.
Foreign Institutional Investors (FIIs) too have turned positive.
They, however, did not rule out high level of volatility after the Supreme Court hearing on Krishna Godavari (KG) gas case between RIL and RNRL.
Rejecting the Ambani family agreement on gas, the government has said a private pact cannot be allowed to threaten national interests and has asked the Supreme Court to make it a party in the ongoing case between the group firms of Anil and Mukesh Ambani.
The Realty and Bank stocks attracted keen demand from investors. As a result, the BSE Realty Index zoomed by 17.62% and the Bankex by 11.10% over the week.
The trading volume, however, was relatively low on the BSE at Rs 27,107 crore and Rs 82,019 crore on the NSE compared to last week’s turnover of Rs 27,528 crore and 86,675 crore respectively.
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First Published: Sat, Jul 18 2009. 12 55 PM IST
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