Sensex shows resilience…Nifty retains 5000

It was a strong show of resilience by the Indian equity markets even as the equities in other parts of the world sank on downbeat US jobs data and concerns over European debt crisis. Turnaround came in the afternoon after a disappointing morning session. Markets even ignored sharp drop in Indian service sector PMI for August.

Indian markets took heart from the recent turnaround in FIIs flows. Foreign investors have been net buyers over the last few sessions after offloading more than US$2bn last month. Moreover, monsoon has been good over the past couple of weeks, raising hope of some softening in food inflation once the new crop comes to the market.



Finally, the BSE Sensex ended at 16,713, losing 108 points. It had earlier touched a day's high of 16,760 and a day's low of 16,561. It opened at 16,678. The NSE Nifty closed at 5,017, down 23 points.

"But, inflation in India remains stubbornly high. This could probably prompt the RBI to go for at least one more hike on Sept. 16. Indian market could rally further if the RBI signals end to its monetary tightening cycle.

Among the BSE sectoral indices, BSE Consumer Durables index was the top gainer, the index gained 2.5%, BSE Auto index was up 1.3% and BSE Realty index was up 0.8%. On the other hand, BSE Oil & Gas index was top loser, the index lost 1.8% and BSE IT index fell 1.5%

Asian stock indices ended mostly lower today, as regional investors reacted to a fairly weak monthly US jobs data that has raised fresh fears about the health of the world's largest economy and its fallout on ongoing global recovery.

Regional resources and export-centric stocks fell amid worries that a sharp slowdown in the US and Europe will hit their revenues.

The Nikkei in Tokyo ended down 1.9% at 8,784.46 while Australia's S&P/ASX 200 ended 2.4% lower. The Hang Seng in Hong Kong was down ~3% while the Shanghai Composite index in China was down ~2%.

European stocks slid in the wake of weaker-than-expected US jobs data. Banks once again paced the decline amid nagging concerns about the region's worsening sovereign debt crisis.