Mkts shrug off weak global cues; Sensex logs best week in 2012

Market players attributed today's recovery to resilient investor mood that continued to bet on a RBI rate cut shrugging off negative developments, including weaker rupee, Fitch's downgrade of Spain's credit rating and US Fed dashing hopes of a fresh stimulus even as Eurozone worries mounted.

Yesterday, global markets gained betting on monetary easing by global central banks but today they fell.

Indices in China, Hong Kong, Japan, South Korea, and Singapore fell by up to 2.09 per cent. European markets also declined as France, Germany and London were quoting lower by up to 1 per cent.

After opening lower, the BSE benchmark Sensex touched the day's low of 16,485.02 points and moved in tandem with global trends.

It recovered in the last two hours of trade after RBI Deputy Governor K C Chakrabarty said: "If inflation comes down, definitely monetary policy rate will come down".

The recovery was led by by a rise in stocks of capital goods, realty and fast moving consumer goods. Sensex finally closed 69.82 points higher at 16,718.87, a one-month high.

Meanwhile the rupee, which closed in the 54-level yesterday, weakened today and was trading at 55.50 levels after a touching a low of 55.70.

In the 30-share index, 21 stocks closed higher led by gains in Sterlite, Gail and L&T. Heavyweights like ITC and Reliance which rose over 1 per cent also supported the rise.

"In the short term, the RBI rate decision will be keenly watched. The April IIP as well as the May Inflation data to be released next week may have a bearing on the policy," said Dipen Shah, Head Fundamental Research, Kotak Securities.

Nifty also closed 18.70 points up at 5,068.35, after slipping below the 5,000-level. (MORE)