Boosted by positive global cues, rate cut hopes in the domestic market and strong foreign fund flows, the sensex rallied 754 points, or 4.7%, this week, its biggest weekly gain this year, and closed at 16,719. On Friday, after a shaky start because of weak Asian trades, the index made a smart recovery in the closing hours to settle with gains. However, dealers said that these gains were mostly because of speculative buying ahead of the weekend. The day’s rally also helped nifty on the NSE close at 5,068, above its 200-day moving average, a crucial technical level. Friday’s rally added about Rs 28,000 crore to investors’ wealth with BSE’s market capitalization now at Rs 59.1 lakh crore. During the week, the sensex gained on the back of talks of a possible move towards a European fiscal union, and a bond sale by Spanish government that was sold at rates less than what was expected by most analysts, partially easing concerns about the country’s struggling banking system. Positive global cues also helped ease pressure on the rupee which on Friday closed at 55.46 to a dollar, its first weekly higher close in the last 10.
During the coming week, a series of domestic and global economic data are expected to keep the market choppy, dealers said.
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