Sensex edges higher even as downed jet lowers sentiment

Russian stocks take the heaviest hit; oil extends gains

World markets remained under pressure on Friday after the downing of a Malaysian airlines jet at the Ukraine-Russia border, new sanctions on Moscow and unrest in Gaza had sent investors scurrying into defensive assets.

World leaders demanded an international investigation into the shooting down of the Malaysian plane with 298 people on board over eastern Ukraine, as Kiev and Moscow blamed each other for a tragedy that stoked tensions between Russia and the West.

Russian markets took the heaviest hit. Dollar-traded stocks in Moscow were down 2.5 per cent to take their losses for the week to more than eight per cent. The rouble, however, was up almost half a per cent though it was heading for its heaviest weekly loss in more than a year.

The BSE Sensex and Nifty edged higher, gaining for a fourth consecutive session, after Tata Consultancy Services' better-than-expected earnings sparked a rally in IT stocks and offset global concerns. The Nifty rose 2.7 per cent for the week, recovering some of its 3.8 per cent fall last week. Trading is expected to be dominated by corporate earnings in the near term, with investors also expected to pay close attention to global factors.

The BSE Sensex ended 0.31 per cent higher at 25,641.56. The index gained 2.5 per cent this week. Lenders extended their winning streak after the RBI on Tuesday exempted long-term bonds raised for the infrastructure and affordable housing sector from reserve requirements.

The Bank Nifty gained 6.5 per cent this week, the best weekly gain in eight, after falling 7.1 per cent in the previous week. IDFC rose 2.9 per cent, ending up 10.3 per cent for the week, ICICI Bank gained 2.1 per cent, while Axis Bank ended 2.1 per cent higher.

Asian markets had a turbulent day. Most emerging Asian currencies fell and Japan's Nikkei stock average tumbled 1 percent to keep MSCI's 45-country All World index on course for a second week of falls.

"The general theme in the market, the predominant theme today, seems to be risk aversion. So we do expect dollar/Asia to head higher in the near term," said Divya Devesh, currency strategist for Standard Chartered Bank in Singapore.

The dollar edged up about 0.2 per cent to 101.34 yen, clawing back some of its slide of nearly 0.5 per cent overnight, its biggest one-day loss since early April. US crude oil gained about 0.3 per cent to $103.53 a barrel after jumping by more than $2 on Thursday and Brent was fetching 108.25, up 1.5 per cent on the week. Russia pumps more than a tenth of the world's crude oil.