Sensex rises for 2nd consecutive week

The BSE benchmark Sensex gained for the second consecutive week by adding another 231 points on expectations the Reserve Bank of India (RBI) will cut interest rates at its June 18 mid-quarter monetary policy review to prop up a slowing economy.

Industrial production in April rose by a dismal 0.1 per cent from a year earlier as manufacturing output remained weak and mining output shrank, deepening worries of a slowdown in the economy.

Global rating agency Standard & Poor's warned India could become the first BRICS nation to lose its investment-grade rating if the South Asian country doesn't revive its growth and push the pedal on reforms.

Inflation moved up to 7.55 per cent in May from 7.23 per cent in April because of spurt in prices of potato, pulses and wheat, although onion and fruits showed a declining trend.

The BSE barometer rose by 230.96 points, or 1.38 per cent, to 16,949.83. The 50-unit S&P CNX Nifty of NSE also firmed up by 70.70 points, or 1.39 per cent, to 5,139.05.

Key benchmark indices surged at the tail-end of the week as stocks rose across the globe on reports central banks of major economies are ready to provide liquidity, if needed, after crucial elections in Greek on June 17. The vote is expected to determine the Greece's future in the euro-zone.

Among the 30 Sensex shares, 17 shares rose and the rest declined.

Despite several negative developments on economic front in the week, the market gained as traders pinned hopes on the apex bank to cut key rates, analysts said.

Kishor Ostwal, CMD of CNI Research Ltd, said even though inflation number disappointed, the Sensex and Nifty rose on expectations of a cut in CRR and repo rate.

RBI is meeting on Monday to discuss policy matters and the Street is expecting CRR cut by 25 bps and possibly 25 bps repo rate cut.

... contd.

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