The Hindu : Business : Sensex retraces 9000-mark

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Wednesday, Jan 28, 2009
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Sensex retraces 9000-mark

RBI’s lower inflation estimates boost sentiment

MUMBAI: The Bombay Stock Exchange sensitive index, Sensex, surged past the 9000-mark by notching up nearly 330 points on Tuesday even as the Reserve Bank of India lowered its economic growth forecast and kept the key policy rates unchanged.

Reliance Industries powered the rally by gaining 6.41 per cent. Sentiment was also boosted by the RBI’s lower inflation estimates of three per cent by the end of this fiscal. After opening on a strong note, the Sensex settled at 9004.08 against last Friday’s close of 8674.35.

The broader 50-share Nifty of the National Stock Exchange also jumped by 92.80 points and closed at 2771.35.

Hesitating for a brief period after the RBI announced a status quo on interest rates, investors made heavy purchases in frontline stocks in a bid to cover their shorts in the futures and options segment. The market is expected to witness high level of volatility in the next two days while the market-wide rollover stood at about 30 per cent as on January 23.

Initiating aggressive monetary measures since October to boost growth, the RBI during the day left its key rates and cash reserve ratio unchanged in its third quarterly policy.

Metal stocks, which were battered last week, recouped and the sectoral index surged 5.5 per cent.

Rupee trims early gains

The rupee pared part of its early gains but still ended stronger by 31 paise at 48.94/95 against the U.S. currency as dollar demand picked up during closing hours amid handsome gains in equity markets.

The rupee closed at 49.25/27 on Friday last.

The domestic currency moved between 48.76 and 48.95 during the day after resuming stronger at 48.86/88 a dollar. — PTI

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