Markets turn the corner, Sensex up by 251 pts in the week

Markets turn the corner, Sensex up by 251 pts in the week

Mumbai: The bull charge continued unabated as the bellwether indices, Sensex and Nifty, kept on their north-bound journey during the week under review following good buying support across the spectrum.

The market resumed the week on a sluggish note due to bad news on the spread of swine flu that took several lives in the country and fears over a below normal monsoon and its consequent impact on the economy.

However, some good news on the industrial production front, the government’s draft new direct tax code and the Free Trade Agreement with Asean helped the market rebound on Thursday, turning the table in favour of the bulls, with the Sensex registering gains of 498 points on Thursday, the biggest single-day gain since 27 May.

Sentiments were perked up further by firm global cues and rating agency Standard & Poor’s upgrade of India’s growth forecast by 30 basis points to 6.3% for the current fiscal, mainly due to the government’s stimulus measures and improvement in the global economic scenario.

The Bombay Stock Exchange 30-share barometer during the week moved in the range of 15,545.13 and 14,701.05 before ending the week at 15,411.63, a rise of 251.39 points or 1.66% over its previous weekend’s close.

In the preceding week, the Sensex was down by a whopping 510.07 points or 3.26%.

The broader 50-share Nifty of the National Stock Exchange also recovered by 98.65 points or 2.20% to close the week at 4,580.05 from its last weekend’s close.

The government on Wednesday released a draft code for radical tax reforms aimed at moderating income-tax rates on individual and companies, abolishing Securities Transaction Tax and increasing deduction for savings up to Rs3 lakh.

As per the data released by the government on Thursday, the IIP showed 7.8% growth in June against 2.7% in May.

Foreign institutional investors (FIIs) remained net sellers in the week while domestic institutional investors (DIIs) were net buyers in the same period, offsetting the negative impact of the FIIs’ sales.

Besides FMCG, all other sectoral indices ended in the green with a gain between 0.69% and 7.78%. Realty and metals were at the forefront.

The realty index flared up by 286.11 points or 7.78% and the metal index by 579.13 points or 4.77%.

During the week, the trading volume declined further to Rs28,281.94 crore and Rs85,078.89 crore compared to Rs30,859 and Rs94,108 crore on the BSE and NSE, respectively, in the previous week.