Stock Market: Investors fall in love with govt business

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By S Jha

New Delhi, December 14: While the Indian stock market kept swinging amid anticipation of the likely actions of the US Fed, indices saw a see saw, giving up most of the gains in the afternoon, with traders not want to burn their fingers with wild moves next morning. Down Jones was trading half a percentage point higher in the afternoon, showing no signs of trepidation on account of the Fed actions.

Inflation has peaked a few weeks ago, and the headline numbers are on decline. Retail inflation in India came at 5.88 per cent, a six months low. There is a growing call on the Reserve Bank of India to cease the rate hikes. Similar is the demand in the US from the Fed. Not inflation, but the rate hikes, it’s feared, would certainly send the economies in recession.

Former Reserve Bank of India Governor Raghuram Rajan joined former Congress chief Rahul Gandhi for a walk as part of the ‘Bharat Jodo Yatra’ of the party. Gandhi and Rajan were seen engrossed in discussions. Later in the evening, Rajan said that the economic situation in India next year wouldn’t be great. He did not say anything startling, for the RBI has already said that the GDP growth in the next few quarters would be hitting the rock bottoms.

On the bourses, the IT, metal and banking scrips covered the green pastures. The investors are counting on the IT companies, as they are most insulated from recession. The likes of Persistent Systems, LT Technology, Tech Mahindra, and Infosys came back in action after they were battered last week following the HCL technology lowering its revenue guidance. Hindalco continued its bullish run on the bourses.

Banking stocks, which have been leading the rally, took the Bank Nifty to a record high, which during the day went past the level of 44100. The Banking stocks also carried the Nifty to the higher levels. The State Bank of India and Indusind Bank have this week been leading the Bank Nifty rally.

But it’s the Nifty PSE index, which the chartists are claiming to have broken out of a range, which is being keenly watched as the new star of the stock market. The government being in a business has normally been known to be a bad idea. But it’s the PSU stocks, which are buzzing, and giving stellar returns in a short span of time. The oil PSUs were in high demand on Wednesday, while their banking and defence counterparts have already given multiple returns this year.

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