Sensex in sight of 16,000
Share indices hit record highs yet again on Monday and the Sensex closes at an all-time high of 15,732.20 after touching 15,773 intra-day, reports MC Vaijayanthi.business Updated: Jul 24, 2007 01:39 IST
Share indices hit record highs yet again on Monday and the Sensex closed at an all-time high of 15,732.20 after touching 15,773 intra-day. Of the 30 stocks in the Sensex, 21 ended with gains and of the total gain of 166 points, the top five gainers moved the Sensex by 143 points.
The rally was lead by Larsen & Toubro and Bharat Heavy Electricals on Monday followed by Reliance Industries, Bharti Airtel and Hindustan Unilever. Larsen & Toubro moved the Sensex by 54 points and Bharat Heavy Electricals by 30 points. “Larsen & Toubro and Bharat Heavy Electricals already have strong order books and the stocks were in limelight as the market expects further orders after the positive news on the Indo-US nuclear deal,” said Sapan Patel of JNP Shares and Stocks.
On a day when Asian markets fell following Dow’s retreat on Friday, the Indian market was buoyant on stock-specific news and the positive outlook on interest rate fundamentals. Hindustan Unilever’s announcement of a buyback has been taken well by the market. The stock moved 5 pc to Rs 204. The street expects the buyback price to be around Rs 235.
The Sensex rally from its low in last July has been mainly aided by a handful of stocks. The single largest contributor, with a 1,045 gain in index points, is Reliance Industries followed by ICICI Bank (703 points). The top eight gainers moved the Sensex by 43 per cent from its yearly low and most of the gainers have already surpassed various price targets research firms had set out.
Sanjay Sinha, chief investment officer of SBI Mutual Fund, said the rally in leading large-cap stocks was fuelled by heavy foreign portfolio investments and he explained the concentration of massive growth in select stocks to foreign institutional holdings in them.
“Around 90 per cent of foreign institutional holdings are in frontline stocks,” he said. The top two movers in the list are two telecom companies, Bharti Airtel and Reliance Communications. There had been a phenomenal growth in the segment that justified the kind of movement in the stocks, Sinha said. Bharti Airtel was the third highest index contributor with 587 points and Reliance Communications came fifth with a 404 points.
A further re-rating of stocks may be difficult, but stocks may see upswings if there are earnings surprises or if there is an embedded value in the business that needs to get unlocked, say experts. Some experts, though, are willing to give another 10 per cent upside to the top two movers, Reliance Industries and ICICI Bank.