Sensex shrugs off inflation concerns, up 138 points at 2-week high

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Mumbai: In a day of volatile trade, the benchmark S&P BSE Sensex shrugged off concerns about a rise in wholesale inflation and gained 138 points to a 2-week high after shares of Tata Motors, Hindalco and ONGC surged.
The 30-share barometer opened higher and fell to the day's low of 19,203.63 after data showed that inflation based on the Wholesale Price Index shot up to a five-month high of 5.79 per cent from 4.86 per cent in June.
While the index recovered on heavy demand for some blue-chip stocks, it fluctuated in positive territory before closing at 19,367.59, a gain of 137.75 points or 0.72 per cent. The index extended its winning streak to the fourth day.
The Sensex has added 702.71 points, or 3.76 per cent, in the past four sessions. It is at the highest level since July 29, when it closed at 19,593.28. The 50-share Nifty index on the National Stock Exchange rose 43 points, or 0.75 per cent, to 5,742.30.
The SX40 index on the MCX-SX gained 0.91 per cent to 11,512.15. "Rate-sensitive sectors are primarily showing most recovery as investors are once again pinning hopes for rate cuts in near term," said Nidhi Saraswat, senior research analyst at Bonanza Portfolio Ltd.
"FIIs are seen as net buyers in equity, showing buying interest from lower levels."
Tata Motors advanced for the second day, gaining 9.67 per cent on strong July sales by its British luxury car unit Jaguar Land Rover. The stock was the top performer on the Sensex, contributing 62.12 points to the index's gain.
ONGC rose 5.27 per cent, contributing 36.28 points to the Sensex gain, while Hindalco Industries climbed 7.1 per cent. Oil and gas shares saw buying on buzz that the government may approve a one-time increase of Rs 2-3 per litre in diesel prices to offset the impact of the rupee's fall.
A mixed trend in the Asian region and a better opening in the European markets influenced investors amid reports that the longest-ever recession to afflict the eurozone came to an end in the second quarter of the year.
Tata Steel firmed up after Q1 consolidated net profit zoomed 90.51 per cent, according to a filing last day.
Asian stocks were mixed following positive cues from Wall Street overnight. Key indices in Japan, Singapore and South Korea closed higher, while indices in China and Taiwan declined. Trading in Hong Kong was cancelled due to a storm.
Most European stocks were higher in early trade as GDP in Germany and France expanded more than expected in the second quarter. Major indices in France and Germany moved up, while UK's FTSE was quoted lower.
In the domestic market, 18 scrips ended higher, led by Tata Motors, Hindalco, ONGC, GAIL India (3.79 pc), Tata Steel (3.59 pc) and Bajaj Auto (2.64 pc). BHEL dropped by 1.86 per cent and Dr Reddy's Lab was down 1.57 per cent.
Among the sectoral indices, S&P BSE-Auto rose by 3.34 pc, S&P BSE-CD 2.91 pc, S&P BSE-Oil&Gas 2.89 pc, S&P BSE-Metal 2.81 pc, S&P BSe-Realty 2.25 pc and S&P BSE-PSU 2.06 pc. The market breadth remained positive, with 1,298 stocks advancing and 1,048 declining. Foreign institutional investors bought shares worth a net Rs 227.08 crore yesterday, as per provisional data from the stock exchanges.
The stocks exchanges are closed tomorrow for Independence Day.