Friday, January 16, 2009

Sensex, Nifty end strong but turnover dismal on 16th Jan'09:Friday

Key indices sprung back Friday after a dismal session the previous day, mirroring overseas markets and cheered by signs the US government would do whatever is necessary to prevent its economy from sinking deeper into recession.

Early Friday in the US, Bank of America and the Treasury Department reached an agreement for an additional $20 billion in capital from the government's emergency rescue fund, along with guarantees against losses on up to $118 billion in troubled assets. The deal came just hours after American lawmakers authorised a second $350 billion package from the government's bailout fund amid mounting speculation that debt-ridden banks would need even more rescue money. Meanwhile, Obama allies unveiled
a $825 billion recovery bill to help jump-start the world's largest economy. This offered the much needed boosted to stock markets across the world.

Back home, foreign funds lapped up frontline stocks that had been battered in the recent sessions, driving the key indices sharply higher. Bombay Stock Exchange's Sensex ended 3.06 per cent or 276.85 points higher at 9,323.59, after climbing to a high of 9,342.47 after opening at 9,125.65. National Stock Exchange's
Nifty rose 3.35 per cent or 91.75 points to close at 2828.45. The index climbed a high of 2835.65 from a low of 2724.20 during the day.

"2950 on Nifty is the next crucial level, where some amount of profit booking will set in. On the downside, 2700 is an important support to watch out for. Given the magnitude of the fall on Thursday, today's move was expected, which was also supported by positive global markets. But the sore point of Friday's trade was the low turnover," said Hitesh Sheth, head of technical research at Prabhudas Lilladher.

The total turnover on NSE stood at Rs 7,268.79 crore compared to Rs 8,178.88 crore in Thursday's trade.

Even as frontline stocks caught the investors' fancy, they shied away from placing bets in mid and small caps. The BSE Midcap Index ended up 0.53 per cent at 3,026.83 after rising to a high of 3,046.90. BSE Smallcap Index ended almost flat at 3,412.77.

Sectorwise, oil & gas, power and metals were in demand. The BSE Oil &Gas Index rose 5 per cent on the back of strong rally in Reliance Industries.

RIL, which had lost 2.95 per cent on Thursday, staged a strong comeback on expectations that the company may settle the dispute over supply of natural gas to RNRL soon. The stock hit a high of Rs 1,221 before settling at Rs 1,218.40, still showing a hefty rise of 6.56 per cent. Other index gainers comprised NTPC (7.69%), Reliance Infrastructure (7.34%), Bharti Airtel (4.77%), Tata Power (4.89%) and ONGC (3.72%).

On the other hand, DLF (-3.51%), Grasim Industries (-1.11%), Tata Consultancy Services (-1.38%), ACC (-0.27%) and Maruti Suzuki (-0.22%) were a disappointment.

Market breadth remained positive with 1,243 advances against 1,156 declines on the BSE.

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