Markets ignore rising food inflation, Sensex gains 133 pts

Rising for the fourth session in a row, the Bombay Stock Exchange's 30-share index closed with a gain of 132.95 points, or 0.71 per cent, at 18,799.66 -- its best close since January 18, 2008, when it settled at 19,013.70.

The wide-based 50-share Nifty index of the National Stock Exchanged increased by 0.57 per cent to finish at 5,640.05. "Markets are doing well on the back of relentless inflow from overseas fund houses, which are bullish on India's growth story," Unicon Financial CEO Gajendra Nagpal said.

On a weekly basis, the Sensex recorded a gain of 3.17 per cent. Despite mixed cues from global peers, Indian markets traded with a positive bias throughout the week.
Stock markets will remain closed tomorrow on the occasion of the Eid-ul-Fitr festival.

"Indian stock markets have so far displayed resilience to news flow pertaining to the global economic slowdown and sovereign debt concerns," brokerage house Reliance Securities said in a note.

"However, there is a possibility of heightened volatility that may creep into domestic markets in these uncertain global times," it added. Barring oil & gas and pharma, all the sectoral indices on the BSE ended in the green, with financial, consumer goods and PSU stocks leading the gains.

It was another day when banking heavyweights like SBI, HDFC Bank and ICICI Bank led from the front. SBI zoomed 3 per cent, HDFC Bank 2.67 per cent and ICICI Bank 1.48 per cent.

With a jump of 3.16 per cent, M&M was the top gainer in the Sensex pack. L&T rose nearly 1 per cent and DLF 1.29 per cent. "Investors are confident that in the coming period, inflation will come down as the monsoon has been good," Nagpal added.

Food inflation increased to 11.47 per cent for the week ended August 28, rising for the second consecutive week, fuelling speculation that the Reserve Bank will hike policy rates at its meeting on September 16.

IT bellwether Infosys continued to move forward and closed 0.67 per cent higher. Tata Steel rose 2.38 per cent, BHEL 1.76 per cent, Hero Honda 1.54 per cent, NTPC 1.45 per cent and HUL 1.33 per cent.

The investor sentiment was also upbeat after the successful placement of debt worth USD 1.3 billion by Portugal eased concerns about sovereign default in Europe, a broker said.

Of the 30 Sensex stocks, 18 ended with gains, while 12 closed in the red. Reliance Industries, which holds the highest weightage in the Sensex, lagged behind and ended 0.22 per cent lower at Rs 957.95.

Cipla sank 1.68 per cent and was the biggest loser in the index. Other major losers were Tata Motors, which declined by 1.58 per cent, while R-Infra fell by 1.30 per cent and ACC by 1.13 per cent. Asian stocks ended mixed. Japan's benchmark Nikkei closed 0.82 per cent higher, while China's Shanghai index declined by 1.44 per cent.

The investor sentiment was upbeat after Australian employers added more workers than estimated and an improving appetite for European government debt eased concerns over the region's budget deficit crisis, brokerage house SMC said. Wall Street rose on Wednesday as investors latched on to positive news coming out of Europe.