Sensex shrugs off GDP blues, gains 516 pts

BENCHMARK indices surged over 3% on Friday as bulls chose to look at the brighter side of a slowing economy. According to a government release, India’s GDP grew 7.9% in the June quarter, the slowest in three-and-a-half years, and much below the 8.8% growth rate clocked in the April quarter. This, and the slight drop in inflation to 12.4%, has raised hopes that RBI may not have to raise interest rates soon. Still, brokers feel it is too early to say if the market is now poised for a s u s t a i n e d u p s w i n g . The FM himself said no conclusion can be drawn from one week’s inflation numbers. Despite the 500-plus point rally in the Sensex, traded turnover on both exchanges combined was under Rs 60,000 crore, indicating the cautious mood among investors. “I don’t think inflation is fully behind us; the market is likely to trade in a 2000-point range on either sides for some time,” says BSE broker Ramesh S Damani. The Sensex gained 516.19 points to end the day at 14,564.53 while the broader 50-share Nifty gained 146 points to close at 4,360.