After touching the 9,000 mark, the Sensex ended last week at 8,966.7 points, registering a growth of 2.4 per cent (210 points) over the previous week’s close. “The markets are moving, then consolidating, then moving up again. The overall trend in the market is looking good,” says D. D. Sharma, senior vice president-research, Anand Rathi. Among the sectoral indices, realty and metal emerged as the biggest gainers, rising by 10.5 per cent and 8.4 per cent respectively over the previous week. “Realty and metal sector gained on technical moves. Being an interest-rate sensitive sector, realty might benefit from expectations of further rate cuts in future,” adds Sharma. The only sector that slipped into negative terrain was capital goods. It declined by 0.3 per cent over the previous week.

Wholesale price based inflation declined to a two-decade low of 0.44 per cent for the week ended March 7, 2009, from 2.43 per cent the previous week. The drastic fall in inflation is fuelling expectations that the Reserve Bank of India may cut interest rates to spur economic growth, especially since India’s quarterly GDP growth rate for the December quarter had slipped to an unexpectedly low 5.3 per cent. Says Sharma: “The sharp fall in inflation is due to the base effect. The low inflation rate has created room for further rate cuts.”

Last week the rupee strengthened against the dollar, appreciating nearly 2 per cent during the week. The rupee ended the week at Rs 50.56 vis-a-vis the dollar. On the commodity front, the price of oil surged nearly 8.5 per cent during the week. Oil is currently trading at $48.8 per barrel. Not much momentum was witnessed in the price of the yellow metal which is currently trading at Rs 15,479 per 10 grams. It rose by a meagre 1.9 per cent during the week.