Free Press Journal

Sensex spurts 173 pts on fag-end buying as inflation eases


Mumbai: Ahead of the general budget, the Sensex today spurted 173 points — its biggest rise in a month — on fag-end buying triggered by global cues and firming rate cut hopes after wholesale inflation fell to a seven-month low.

Staging a recovery after Thursday’s 255-point drop, the Sensex resumed higher at 20,265.13, rebounding from four-month closing lows. The index then moved in a 250-point range.

Boosted by last-hour buying, it closed at 20,366.82, a rise of 173.47 points or 0.86 per cent. Today’s gain is the best since the 256.61-point jump on January 15.

The surge was led by stocks of IT, telecom, banking and refinery sectors. In Sensex, Tata Motors (3.25 per cent) and GAIL (2.56 per cent) were the biggest gainers. RIL, ITC and Infosys were among the 21 winners in 30-share Sensex.

After retail inflation plunged to two-year lows in January, data today showed wholesale inflation eased to a seven-month low of 5.05 per cent in January. With industrial output in negative terrain and price rise under control, hopes rose that the RBI will cut rates soon, said brokers.

“The WPI inflation came in lower than estimates. Going ahead, we believe that, the Vote on Account will be watched closely. Within that, markets will try to understand the contours of the fiscal deficit. Moreover, any indirect-tax benefit to any sector may have an impact,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
The NSE 50-share CNX Nifty rose by 47.25 points, or 0.79 per cent, to end at 6,048.35.

Foreign Institutional Investors buying shares worth Rs 399.40 crore (net) yesterday, aso aided domestic sentiments.

However, the Sensex lost 9.74 points since last Friday’s closing — the third straight weekly drop.

Globally, most of the Asian stocks ended higher following gains at the US stock market last night.

Key indices in Hong Kong, South Korea, China and Taiwan firmed up by 0.54 per cent to 0.83 per cent while indices in Japan and Singapore eased by 0.04 per cent to 1.53 per cent. Data that showed the euro-area economy grew more than forecast in fourth quarter, drove gains.