Reference Auto

Now with the festive season approaching, the Sensex has remained pretty subdued and has still been hovering around the 16,000 points-17,000 points mark and chances are that it could miss a target of 20,000 points by the year end, leave alone achieving the 22,000 points it was thought just a few months ago.

The BSE Sensex saw a surge of 1.2 per cent on Friday, the last day of weekly trading, which is its highest close in about a month.

So far as weekly performance goes, it is the best in the last six weeks. This is mainly owing to the buoyancy that is back in the Euro Zone markets and a bullish feeling that there could be a solution to the crisis at the end of the tunnel.

The benchmark 30-share BSE index ended 1.1 per cent higher at 17,082.69 points on Friday, with 19 out of the 30 Sensex stocks rising. The index, which had opened 0.3 per cent lower during the day, added most gains during afternoon trade after remaining volatile in the morning.

The Sensex closing figure is a rise of 5.24 per cent or 850.15 points from last week’s close of 16,232.54 points.

The 50-scrip Nifty of the National Stock Exchange also surged 244.25 points or 4.99 per cent in the week to end at 5,132.3 points on Friday.

Metal and banking scrips were the most buoyant during the end of the week with Sterlite and Jindal Steel stocks surging over 8 per cent.

The close figure was the Sensex’s highest since a month. During the week, the benchmark index may have added 5 per cent, but is still down 16.7 per cent this year as surging interest rates are taking a big toll on the profits of India Inc.

Also, a litany of scams have tightened the noose around the government’s functioning.

India’s largest company Reliance Industries and the country’s biggest software services exporter TCS surged 2.4 per cent and 3.8 per cent, prior to their quarterly earnings and contributed the most to the main index’s gains.

On Saturday, Reliance’s earnings beat Street estimates and this has given a fillip to the perception that a bull run may be maintained in the next week or two. The energy giant saw a profit rise of 16 per cent (at Rs 5,703 crore), which is the highest growth in nearly four years.

Reliance results as well buzz from Europe came in as encouraging news and shadowed the gloom – the inflation figures – that emerged from government data.

The current inflation is touching almost double digits at 9.75 per cent and this may prompt the Reserve Bank to hike rates again, which will slow down demand further.

The central bank has raised rates on over 10 occasions since March last year and another rate hike could be seen at its policy review on October 25.

But with heavyweight Reliance logging good numbers, the Sensex could inch very closer to 20,000 points or could miss it by a whisker, providing an opportunity to sell for those who lapped up selective scrips like Reliance and TCS in the last few months.