The slide in oil prices to their lowest level in three months powered a rally in US stocks on Friday, 8 August 2008. The Dow Jones industrial average rose 302.89 points, or 2.65%, to 11,734.32, while the Standard & Poor's 500 Index jumped 30.25 points, or 2.39%, to 1,296.32. The Nasdaq Composite Index gained 58.37 points, or 2.48%, to 2,414.10.
In Asia, key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were up by between 0.17% to 1.5%.
The Indian stock market has staged solid rebound from lower level tracking recovery in global markets triggered by a sharp fall in commodity prices led by oil price which had struck a record high above $147 a barrel on 11 July 2008. From a low of 12,575.80 on 16 July 2008, the barometer index BSE Sensex jumped 2,592.02 points or 20.6% to 15,167.82 on 8 August 2008.
Inflation which hit a fresh 13-year high of 12.01% in the year through 26 July 2008, remains a concern. High inflation will mean that tight monetary policy stance by the central bank may continue. The Reserve Bank of India, at its quarterly policy review late month raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation and dampen inflationary expectations. RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%.
The government will tomorrow, 12 August 2008, release industrial production data for June 2008. Industrial production grew at the slowest pace in more than six years in May 2008, at 3.8%, as against 10.6% in the same month of 2007, with manufacturing showing signs of acute deceleration.
As per provisional data released by the stock exchanges, foreign funds on Friday, 8 August 2008, sold shares worth a net Rs 142.22 crore. Domestic funds bought shares worth a net Rs 16.29 crore.
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