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Sensex over 12k but wait & watch

Playing catch up with the global markets that rose on Thursday and Friday when Indian markets were closed due to the polling in Mumbai, the Sensex led the global markets on Monday, rising 6.4 per cent to close above the 12,000 mark for the first time in seven months.

business Updated: May 05, 2009 01:54 IST
HT Correspondent

Playing catch up with the global markets that rose on Thursday and Friday when Indian markets were closed due to the polling in Mumbai, the Sensex led the global markets on Monday, rising 6.4 per cent to close above the 12,000 mark for the first time in seven months.

Fighting the gloomy international economic mood and domestic political uncertainty, the 732-point rise that helped the Sensex close at 12,135 was the highest single-day gain since October 31, 2008, when it climbed 744 points.

The buying was led by foreign institutional investors (FIIs) who emerged as net investors of Rs 1,417 crore on NSE and BSE combined. Domestic institutional investors stayed away.

“It (the rise) started with a strong cue from the Asian markets along with short covering in the market,” said Amitabh Chakraborty, president, equities, Religare Enterprises. While the Singapore market was up 5.7 per cent, Hong Kong rose 5.5 per cent and China 3.3 per cent.

Experts gave some credit to the better-than-expected fourth-quarter results.

But will the Sensex continue its climb? Experts do not see it as a sustainable revival yet, because global economic stability remains uncertain, as does domestic political stability.

“While poll results and global factors will play a big role, I expect volatility both in the current week and the next,” said Sudip Bandyopadhyay, MD, Reliance Money.

CJ George, CEO, Geojit Securities, said, “Retail investors should wait before investing as we are not getting any concrete symptoms of global financial markets settling down. Also, there is uncertainty about election results.”