Reference Auto

Even though the Central government has been cornered on two fronts — rampant corruption in awarding of 2G licences and escalation of vegetable prices, the general perception this year is that the government will present a people-friendly Budget, which has probably led to positive sentiment in the country’s markets.

This has resulted in the Sensex snapping weekly losses last week after falling for three consecutive weeks. However, last week inflation as well as food inflation saw some moderation.

Not that the negative sentiment around the world has died down. Protests in Egypt led to ouster of president Hosni Mubarak and the agitation has spread like wild fire to nearby countries such as Libya, where the country’s leader Gaddafi defied protests and handed over power to his son.

Gaddafi is believed to have fled the country. Also, there is an uprising taking place in Bahrain that is threatening to be a rerun of Egypt. Protests have also been reported from Morocco.

Meanwhile, the Sensex of the Bombay Stock Exchange closed the week at 18,211.52 points, a rise of 2.72 per cent or 482.91 points from the previous week’s closing figure of 17,728.61 points.

During the previous three weeks, the Sensex had shed 1,279 points. But last Friday, key indices fell sharply owing to profit booking. The benchmark Sensex fell 1.6 per cent to end at 18,564.08 points on Friday.

The 50-share Nifty of the National Stock Exchange ended the week at 5,458.95 points, a rise of 145.9 points or 2.8 per cent from the previous week’s close of 5,313.05 points.

Food inflation slid to 11.05 per cent for the week ended February 5 after it fell nearly four percentage points to 13.07 per cent in the previous week.

Inflation (on wholesale prices) also cooled to 8.23 per cent in January against 8.43 per cent last month.

The figures have come as a breather for the government which has been trying out various ways to tighten monetary policy and crack down on hoarders to check inflation.

Union finance minister Pranab Mukherjee hoped the prices would moderate further and food inflation would come down to single digits before March.

On Friday, major gainers on the 30-scrip Sensex include Hindustan Unilever, a rise of 1.99 per cent at Rs 279.25; Jindal Steel, which saw a surge of 1.55 per cent to Rs 679.40; Cipla, up 0.57 per cent to Rs 307.30 and Bhel up 0.56 per cent to Rs 2,093.15.

Losers on the Sensex pack were Reliance Communications, which saw a slide of 6.8 per cent at Rs 93.15. Reliance Infra was down 5.6 per cent at Rs 605.60. Jaiprakash Associates saw a fall of 5.54 per cent at Rs 85.25 and Tata Motors was down 3.91 per cent to Rs 1,201.95.

Asian markets saw mixed response with the political tensions in West Asia continuing to dent the bourses. Hong Kong's Hang Seng ended 1.26 per cent higher at 23,595.24 points, while the Shanghai Composite index tanked 0.93 per cent to close at 2,899.79 points. The Japanese Nikkei ended flat.

There is a strong belief that Pranab Mukherjee will provide adequate tax relief to the middle class, among many people-friendly measures in the Union Budget, and this could act as a positive trigger for the markets.