Date:04/12/2008 URL: http://www.thehindu.com/2008/12/04/stories/2008120455901700.htm

Business

Sensex ends flat

MUMBAI: The benchmark Sensex of the Bombay Stock Exchange on Wednesday closed almost unchanged after intermittent bouts of selling and buying, though realty and banking shares — two interest rate sensitive stocks — notched up handsome gains.

Markets had a firm opening which marketmen credited to strong cues from other Asian bourses. They said anticipation of fiscal and monetary measures by the Central Government to give a booster to the economy, particularly to the housing and export sectors, generated buying support in realty and banking stocks.

After swinging wildly between the positive and negative terrain, the bellwether index closed at 8747.43, up by a marginal 8.19 points from its previous close. The wide-based National Stock Exchange index Nifty, on the other hand, closed lower by 1.35 points at 2656.45.

Realty stocks attracted buying on expectation of a stimulus package by the Centre, while banking shares rose in anticipation of rate cuts by the Reserve Bank of India.

A decision on the revival package was taken by an apex committee meeting on Tuesday, chaired by the Prime Minister Manmohan Singh, who also holds the finance ministry portfolio. The RBI is also expected to slash key rates to shore up the housing sector, which is reeling under the global financial meltdown.

The barometer after trading higher by nearly 115 points in the opening trade fell sharply barely one hour later to trade 106 points lower. And then throughout the session the index oscillated between red and green.

Brokers said profit selling pulled down the Sensex from its high levels as investors thought it prudent to sell at existing attractive levels. Prevailing tension between India and Pakistan also affected the sentiment.

Rupee extends gains

Extending the gains for the second day in a row, the rupee closed at 50.00/02 against the dollar in anticipation of an increase in capital inflows in the wake of surge in Asian stock markets.

A leading trader in foreign exchange said banks were selling dollars either on RBI’s instructions or on their own as they feel there is ample liquidity in the system, helping the rupee to gain. The rupee closed at 50.16 on Tuesday.

In active trading, the rupee resumed higher at 49.91/95 a dollar and later moved between 49.78 and 50.10. It finally ended at 50.00/02, a gain of 16 paise. — PTI