Sensex finds its groove
Foreign institutional investors (FIIs) drove the Bombay Stock Exchange’s benchmark Sensex to within sniffing distance of the 20,000 mark on Wednesday. HT reports.business Updated: Mar 31, 2011 04:07 IST
Foreign institutional investors (FIIs) drove the Bombay Stock Exchange’s benchmark Sensex to within sniffing distance of the 20,000 mark on Wednesday.
The Sensex ended Wednesday at a new two-month high of 19,920, as FIIs invested a net of Rs 1,500 crore during the day, taking the total FII inflow over the last six days to Rs 4,552 crore.
The broad-based National Stock Exchange index Nifty also added 51.3 points to 5,787, after crossing the crucial 5,800 level.
Experts say the support of foreign fund houses is the single biggest reason for the 8.1% surge over the last seven trading sessions.
“Strong FII participation has been the primary reason for lifting the market sentiments,” said Sanjay Sinha, CEO, L&T Mutual Fund. “Also the fact that the market got some time to properly factor in the impact of the Middle East and North Africa (MENA) crisis and the aftermath of the Japan earthquake has also helped the markets.”
While there is a hope for a quicker resolution of the Libya crisis with the intervention of the Nato forces, experts feel it still remains a concern.
“Crude price continues to be the biggest concern even now as inflation is a big worry in India,” said R Venkataraman, executive director, India Infoline Financial Services.
Another factor that has resulted in gains for Indian markets is the covering of short sellings. “There was a lot of fear of markets collapsing but with sentiments revising and fundamentals looking good, short selling has got covered and that has added momentum to the market,” Venkataraman said.
The rally, which was initially limited to large cap stocks, saw the participation of mid-cap and small-cap stocks on Wednesday. The mid-cap index at BSE rose 1.5% and the small-cap index by 2.2% on a day when the Sensex gained 0.9%.
Among sectoral indices, consumer durables and real estate indices were the biggest gainers at BSE, rising by 4% and 3.1% respectively. Cipla and Jaiprakash Associates with gains of 5.2% and 4.2% respectively were the biggest gainers.