Markets surge as inflation falls, key index crosses 10,000 (Roundup)December 18th, 2008 - 6:52 pm ICT by IANS
Mumbai, Dec 18 (IANS) Falling rate of inflation Thursday boosted investors’ confidence in equities markets, pushing a key index up 3.72 percent to close above 10,000 points.The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose 361.14 points or 3.72 percent from Wednesday’s 9,715.29 points to close at 10,076.43 points.
Earlier in the day, government data showed that India’s annual rate of inflation dropped further to 6.84 percent for the week ended Dec 6 from 8 percent the week before.
“Lower inflation coupled with attractive valuations have certainly helped the mood of the market. These kind of bounces are normal in a bear market when the market is trading at such low levels,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
The broader-based 50-share S&P CNX Nifty of the National Stock Exchange (NSE) also followed a similar trend to close at 3,060.75 points, up 106.4 points or 3.6 percent from its previous close of 2,954.35 points.
Broader market indices were, however, a bit slower to rise with the midcap index trading 2.18 percent higher, while the smallcap index rose only by 0.91 percent over its previous close.
All 13 sectoral indices turned positive with realty and banking stocks doing particularly well. The BSE realty index rose 7.27 percent, while the banking index rose 7.06 percent.
Among top gainers in the Sensex were DLF (up 9.56 percent to close at Rs.253.2), Jaiprakash Associates (up 9.36 percent at Rs.76.95) and Reliance Infrastructure (up 9.32 percent at Rs.549.15).
Top losers in the Sensex were Grasim Industries (down 0.33 percent to close at Rs.1,234.4) and Sterlite Industries (down 0.11 percent at Rs.271.2).
Analysts are still keeping their fingers crossed although the Sensex moved past the 10,000-mark. “It will be too premature to conclude that we are out of a bear market even though the equity markets are in an up-trend,” added Thunuguntla.
Trading on Asian markets also picked up, with the Nikkei, a key index of the Tokyo Stock Exchange, rising 0.64 percent higher than its previous close.
The Hang Seng, a key index of the Hong Kong Stock Exchange, was also on the rise with gains of 0.24 percent over its previous close.
Tags: annual rate of inflation, attractive valuations, bombay stock exchange, grasim industries, national stock exchange, rate of inflation, sectoral indices, smallcap index, sterlite industries, top gainers