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Journalism of Courage
The Bombay Stock Exchanges 30-share benchmark index,Sensex,ended last Friday with a gain of 24 points at 18,167.03 points compared with the previous weeks closing at 18,143 points. “I think the market was reasonably flat. While some sectors like banking and real estate did reasonably well,sectors such as metals underperformed. If a correction takes place going forward,the banking sector may underperform. Such a correction,if at all,will be due to a global correction. The sector may come under pressure then due to global developments,” said Prashant Sharma,chief investment officer,Max New York Life Insurance.
During the week,the government released data on the index of industrial production (IIP) and wholesale price index-based food inflation. The growth of the industrial output for June slipped to its slowest pace in 13 months at 7.1 per cent compared with 11.5 per cent in the previous month and 8.3 per cent during the corresponding period a year ago. Food inflation,as measured by the Wholesale Price Index (WPI),on the other hand,shot to double digits at 11.4 per cent for the week ended July 31. This was around two percentage points more compared with the previous week. Food inflation entered the double digits zone again after moderating to single digit in the second week of July.
However,he said that on the inflation front,there was a need to exercise more caution. “We are a bit cautious (on inflation) and it may remain high for 4-5 months. It will fall mainly due to base effect. Therefore,we see the central bank increasing interest rates,” he said.
During the week,the banking sector was up by 3.42 per cent and the capital goods index gained 4.44 per cent. However,metals were down by 0.85 per cent.
