Close: Markets rebound buoyed by low inflation

Close: Markets rebound buoyed by low inflation
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First Published: Thu, Feb 26 2009. 05 07 PM IST
Updated: Thu, Feb 26 2009. 05 07 PM IST
New Delhi: On the back of fag-end buying amid short-coverings mainly in auto, refinery and IT counters due to a fall in inflation as well as firm European cues, the benchmark Sensex reversed its initial weak trends and ended up by another 52 points, despite sustained capital outflows.
Brokers attributed the recovery in share values mainly to the covering of short positions on the last day of the February derivatives contract today.
The Bombay Stock Exchange 30-share Sensex initially touched a low of 8,788.32 but rebounded sharply to settle the day at 8,954.86, a rise of 52.30 points or 0.59 per cent over its previous close. Yesterday it was up by over 80 points.
The 50-share Nifty of the National Stock Exchange too rose by 23.15 points or 0.84% to 2,785.65 from its last close.
Asian indices, however, gave a mixed performance with a downward bias due to fall on Wall Street on Wednesday on warning given by the US government about the financial institutions.
However, a smart rally in European markets at the opening also helped the late recovery in the index.
Continuing its downward slide, inflation fell to about a 15-month low of 3.36% during the week ended February 14 against 3.92% in the preceding week, providing greater room to the apex bank to cut interest rates to perk up the slowing economy.
S&P cut its outlook on India’s long-term sovereign credit rating to negative from stable on Tuesday, citing worsening government finances, which could raise Indian firms’ overseas borrowing costs and weaken the rupee.
In the Sensex pack, Ranbaxy Lab fell more than 18% to Rs169.95 after the US regulators said one of its plants in India had falsified data and test results. The healthcare index rose by 0.20% to 2,607.13.
The auto sector index gained the most, rising 2.74% to 2,694.30, on expectations that the excise and service rate cut might reduce cost and boost car sale.
The oil and gas segment index was the second-best performer, rising 1.28% to 6,165.33, followed by the Teck index, which rose 1.21% to 1,761.05.
The IT index rose 1.14% to 2,110.69, the FMCG index 1.02% to 2,036.39, the power index 0.89% to 1,756.01, the metal index 0.82 per cent to 4,680.63, the capital goods index 0.35% to 5,923.48 and the PSU index 0.32% at 4,989.70.
However, the bank index fell 2.15% to 4,185.15, the consumer durables index 1.33 per cent to 1,555.12 and the realty index by 0.07% to 1,446.28.
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First Published: Thu, Feb 26 2009. 05 07 PM IST
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