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Journalism of Courage
After a strong opening, Dalal Street pared gains again on Monday. Stocks — led by banking stocks — rose nearly 2 per cent on hopes for a recovery in battered US markets, but concerns over accelerating inflation kept a lid on the gains. The benchmark 30-share BSE Sensex ended up 295 points at 15,289.40. It rose as high as 15,351.31 as trading resumed after a four-day weekend.
“The market opened with a positive note taking cues from last week’s US market closing, but it lost some of its gains during the day on concern of higher than expected inflation at 5.92 per cent. High inflation led by increasing oil and food grains prices is expected to impact economic growth and lead to slowdown in Q4 of 2008,” broking firm Religare said in a note.
“We have started witnessing selective buying in large caps but the market will continue to take cues from overseas development as FII activity has reduced,” it said. The pay rise recommended by the Pay Commission for government employees would add upward pressure to annual inflation that hit a 10-month high in early March. “We may be seeing the market bottoming out temporarily right now, but the concerns on inflation, economic growth and now the pay commission payments remain high,” said a fund manager.
The Sensex is 28 per cent below its record high of 21,206.77 hit on January 21, and nearly a quarter down in 2008. ICICI Bank rose nearly 5 per cent to Rs 804.55 and SBI gained 2.7 per cent as investors betted improving US markets would boost sentiment for the battered sector.
