After a break of three days of losing run Sensex on Friday surged by nearly 351 points to end at 19,177.93 on the back of larger than expected fall in WPI inflation and stronger rupee making investors richer by over Rs 90,000 crore as 13 sectoral indices finished higher with over 1,400 stocks logging gains.
Finance Minister P Chidambaram’s comment that Government would announce steps soon to boost investment and growth, also supported markets.
Sensex resumed higher at 18,959.83 tracking strength in Wall Street on Thursday and moved up further to a high of 19,213.10 as rate cut hopes were revived after WPI inflation fell to over three-and-half-year low to 4.7 per cent in May. It ended at 19,177.93, a gain of 350.77 points or 1.86 per cent. The index had lost 613.91 points in past three days.
“Supportive global markets, appreciation in rupee and supportive comments from the FM helped improve the sentiment. WPI inflation also came in below expectations, improving sentiments ahead of the RBI policy meeting on Monday,” said Dipen Shah, Head of PCG Research, Kotak Securities.
lower inflation on account of declining prices of manufactured items and recent weak IIP data boosted hopes of monetary action by RBI on June 17, traders said. The rupee bounced back by 47 paise to close at one-week high of 57.51 against the US dollar following strong recovery in local stocks and fresh dollar selling by exporters.