BSE Sensex shrugs off inflation to close 81 points higher

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The benchmark 30-share sensitivity index climbed 81.40 points to 17,434.94, its highest close since May 5, with 18 components ending higher. The index touched a high of 17,497.36 and a low of 17,315.52 during intraday trade.

The index, which hit a record high of 21,206.77 on Jan. 10 and climbed 10.5 percent in April, has closed 4.17 percent higher for the week. However, it is still down nearly 14.20 percent this year.

The best performer of the day was Ranbaxy Laboratories, which rose 3.29 percent to Rs.510.70.

India's No.2 mobile services provider Reliance Communications advanced 2.18 percent to Rs.601.85.

FMCG majors Hindustan Unilever (HUL) and ITC climbed 2.14 percent and 0.18 percent to Rs.243.70 and Rs.226.95 respectively.

Among blue chip financial stocks, HDFC Bank, State Bank of India (SBI) and ICICI Bank jumped 1.77 percent, 1.39 percent and 1.34 percent to Rs.1502.30, Rs.1704 and Rs.941.15 respectively.

Engineering and construction major Larsen & Toubro (L&T) and top listed petrochemical refiner Reliance Industries (RIL) gained 1.14 percent and 0.48 percent to Rs.2996.35 and Rs.2635.20 respectively.

Auto majors Tata Motors and Mahindra & Mahindra ended up 1.07 percent and 0.20 percent to Rs.669.75 and Rs.662 respectively.

Other gainers were Jaiprakash Associates (up 1.69 percent to Rs.270.10), Tata Steel (up 1.02 percent to Rs.890.90), Satyam Computer Services (up 0.88 percent to Rs.488.15), DLF (up 0.83 percent to Rs.649.20), Reliance Infrastructure (up 0.67 percent to Rs.1460.60), Grasim Industries (up 0.51 percent to Rs.2289.80) and ONGC (up 0.06 percent to Rs.950.90).

The day's top loser was Ambuja Cements, which fell 1.07 percent to Rs.110.90.

Tech stocks Infosys Technologies, Tata Consultancy Services (TCS) and Wipro declined 1.07 percent, 0.94 percent and 0.53 percent to Rs.1871.15, Rs.976.15 and Rs.506.15 respectively.

India's largest mortgage lender Housing Development Finance Corporation lost 0.95 percent to close at Rs.2766.90.

Telecom giant Bharti Airtel slipped 0.57 percent to Rs.851.35.

Other losers were Cipla (down 0.56 percent to Rs.212.50), Maruti Suzuki (down 0.46 percent to Rs.818.95), NTPC (down 0.31 percent to Rs.191.05), ACC (down 0.30 percent to Rs.680.05), BHEL (down 0.25 percent to Rs.1795.30) and Hindalco (down 0.17 percent to Rs.203.70).

Among the sectoral indices, all the counters, except IT (down 0.42 percent), ended up with Metal counter being the maximum gainer, jumping 1.90 percent.

The BSE Midcap and Smallcap indices gained 0.70 percent and 0.86 percent respectively to 7129.70 and 8620.26.

The market breadth was overall positive as 1547 shares advanced, 1137 shares declined and 84 shares remained unchanged.

The market will be closed on Monday on account of a local holiday.

The broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) ended up 0.83 percent or 42.45 points at 5157.70. The index touched a high of 5167.40 and a low of 5106.40 during intraday trade.

According to market analysts, investors have taken in their stride all negative news pertaining to the economy, but have failed to make any headway as the market remains directionless.

"This is a purely trading market and not for investment, and thanks to lack of immediate triggers it does not even have a direction right now," said Daljeet Kohli, head of research at Emkay Shares and Stock Brokers Ltd.

"Most of the negative news on the economy front has been factored in, so inflation does not surprise anybody any more," he said.

According to Hitesh Agarwal, research head at Angel Broking, the market was in a consolidation phase after the January correction and until March end. "It is now beginning to show signs of strength. Slowdown in negative news from the global market will further stabilize the market. Market is looking good next week unless major negative news changes sentiments. Next level to look on the Sensex will be 18,000-18,300. If it manages to breach these levels, it can be said we have crossed the barrier and further climb is possible," he said.

As for inflation, the market "had anticipated a rise in inflation and discounted it. There's consensus that government measures will bring it down to 6 percent in few weeks," he added.

India's wholesale price index (WPI)-based inflation rate has risen to a new 3 and 1/2 years high of 7.83 percent in the 12 months to May 3.

Global crude oil prices also touched a new peak of $126.29 a barrel in New York after touching a record high of $127.82.

Elsewhere in South Asia, Pakistan's Karachi 100 and Sri Lanka's Colombo All-Share slipped 1.71 percent and 0.51 percent to 14,232.89 and 2,595.64 while Bangladesh's Dhaka Stock Exchange gained 1.09 percent to 3052.61.

Among the Asian markets, Japan's Nikkei 225 fell 0.23 percent to 14,219.48 and China's Shanghai Composite dropped 0.36 percent to 3624.23.

However, Hong Kong's Hang Seng advanced 0.41 percent to 25,618.86; Taiwan's Taiex climbed 0.44 percent to 9197.41; South Korea's Kospi jumped 0.17 percent to 1888.88; Indonesia's Jakarta Composite gained 0.78 percent to 2468.84; Singapore's Straits Times soared 1.06 percent to 3241.49; and Malaysia's Kuala Lumpur Composite ended up 0.50 percent to 1300.67.