Sensex gains another 524 pts

Ignoring the weak trend in many Asian markets, Indian stocks shot up 4 per cent on frenzied buying in bank stocks...

Ignoring the weak trend in many Asian markets, Indian stocks shot up 4 per cent on frenzied buying in bank stocks, RIL and Bharti Airtel coupled with short covering. A sharp fall in crude oil prices for the third day in a row on Thursday also boosted the sentiment.

The rally was led by banks, as slower-than-expected inflation at 11.91 per cent eased concerns of further monetary tightening by the Reserve bank of India. After Thursday’s 536-point rally, the 30-share BSE Sensex surged another 524 points to 13,635.40. The broad-based S&P CNX Nifty advanced 145.05 points or 3.67 per cent to 4,092.25.

“We were expecting inflation to cross 12 per cent this week. But that has not happened. If inflation falls next week, the market would see another relief rally,” said a BSE dealer. The rally was spread across sectors barring IT and metal.

What added to the bull frenzy is another drop in crude oil prices. On the NYME, August crude settled $5.31 lower at $129.29 a barrel on Thursday. Analysts feel the market could witness a sharp turnaround if crude oil prices fall further. However, developments on the political front will play also play a crucial role in the market’s movement. “If the government survives in the vote of confidence motion, then the market may move up towards,” said an analyst with Geojit Financial Services.