Rising for a sixth straight session the 30-share Bombay Stock Exchange (BSE) sensitive index Sensex on Friday jumped 157 points or 1% to close at 17,234, its 11-month high, as Foreign Institutional Investors (FIIs) stayed in the buy mode.
Experts, however say that the rally is unsustainable as there are still challenges before the Indian economy.
“The pace of the rally, driven mainly by FII money, that we have seen since the start of the year is unsustainable,” said Deven Choksey, managing director, KR Choksey Securities. “However chances of deep correction from this level are also very low,” he added.
The Sensex, which fell 25% in 2011, has gained around 11% since the start of January 2012.
The wider 50-stock National Stock Exchange Nifty too gained 1% or 46 points to close at 5,205 points on Friday.
“There are still some challenges such as the outcome of elections in Uttar Pradesh, the budget and what happens to the crisis in euro zone,” said Rahul Arora, CEO, institutional equities, Nirmal Bang.
FIIs made net investment of R1,172 crore on Friday and have invested around R8,100 crore since the start of this year.
Reliance Industries and Infosys, which contribute about a fifth to the benchmark index, rose 3.7% and 2.2% respectively.