Sensex rises on revival in investor sentiment

Indian markets logged their first weekly gain in six weeks, rising a little over four per cent on the back of a global risk rally which sent the Dow Jones Industrial Average to record highs, ahead of signs of recovery in the world economy. Other major indices such as the Japanese Nikkei 225 index, France's CAC 40 and the German DAX are all at 52-week highs.

After four days of gains, the Bombay Stock Exchange index Sensex today rose 269.69 points, or 1.4 per cent to 19,683.23, while the 50-share Nifty added 82.40 points, or 1.4 per cent to 5,945.70.

"I think the market sentiment is very healthy at the moment. Last month's selling had made the market even more attractive. We remain optimistic due to the good Budget, strong foreign flows and views from rating agencies like Moody's. A quarter basis point rate cut on March 19 (when the Reserve Bank is to review its monetary policy) will boost the market again. However, if there is no rate cut, it could disappoint the markets," said Motilal Oswal, chairman of Motilal Oswal Financial Services.

"India is participating in the global rally after being oversold. Hopes of an interest rate cut have aided the momentum," said Anand Tandon, chief executive officer at JRG Securities.

Moody's Analytics has said the December quarter was the bottom of the economic cycle and India's economic growth will be seven per cent in 2014.

In the previous five weeks, the market had fallen nearly 1,200 points or six per cent on global concerns surrounding a rollback in the US Federal Reserve stimulus and an unfavourable election outcome in Italy. However, it saw a sharp turnaround in the past four sessions. Foreign institutional investors have been net buyers for five straight sessions, purchasing Rs 2,685 crore of Indian equities during the period, according to data from the Securities and Exchange Board of India. They were net buyers by an additional Rs 1,283 crore today, according to provisional exchange data.

VK Sharma, head of private broking and wealth management at HDFC Securities, is looking to the central bank and oil prices for further triggers. "The recent fall in crude (oil) prices has given some elbow room to the finance ministry," he said. Brent crude prices touched $109.71 a barrel, down a little over eight per cent from a high of $119.34 in February. Lower crude prices are a positive for the Indian economy, which imports most of its need.