Bull-run on Indian bourses to continue unabated | india | Hindustan Times
Today in New Delhi, India
Nov 20, 2017-Monday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Bull-run on Indian bourses to continue unabated

The positive momentum in the market is likely to continue in the coming sessions as overseas investors pour more money.

india Updated: May 06, 2006 11:41 IST

The positive momentum in the Indian stock market is likely to continue uninterrupted in the coming sessions as overseas investors pour more money into the trading ring buoyed by strong economic growth prospects.

Analysts say although the market may witness selling pressure in select stocks at sharply higher levels, the overall trading pattern would remain positive on sustained inflows of domestic as well as overseas funds.

The market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed Friday at 12,359.70, representing a massive gain of 507.77 points or 4.23 per cent over its previous week's close.

The stock market had closed with a loss of 1.5 per cent in the previous week as investors dumped stocks after the market regulator cracked down on top brokerage firms and banks for alleged manipulation in initial public offerings.

The key index touched an all-time intra-day high of 12,482.91 on May 4 on sustained institutional buying interest in new as well as old economy heavyweights.

"Strong liquidity will continue to drive the market northwards in the coming days. Domestic mutual funds and foreign institutional investors will continue to pump in money," said an analyst with a Mumbai-based brokerage firm.

"After turning slightly sluggish in the past couple of weeks, flow of overseas funds into the domestic trading ring has again turned strong in the recent sessions. This trend is likely to continue," added the analyst.

Experts say the flow of funds has got a boost by the impressive financial numbers announced by heavyweight new as well as old economy companies like Tata Consultancy Services, Infosys Technologies and Reliance Industries.

India's economy is likely to expand between 7.5 per cent and eight percent in the current fiscal year on sustained growth in farm and industrial production, according to the Reserve Bank of India (RBI).

India's economy grew by a robust 8.1 per cent in the fiscal year ended March 31, 2006, as compared to 7.5 per cent in the previous year. The average eight percent growth in the last three years has made the country one of the fastest growing economies in the world.

In the truncated intra-week trade, the stock market closed on a positive note Tuesday and kept surging higher all through the week on sustained institutional buying in frontline stocks.

The stock market was closed Monday for a local holiday.

Massive investment inflows in Asia's second fastest growing economy after neighbouring China on hopes of sustained higher economic growth was helping the index to scale new peaks almost on a regular basis in the last few months.

The booming Indian stock market achieved another milestone April 20 with the key index crossing the magical 12,000-mark for the first time in the history of the capital market on massive institutional buying.

Foreign institutional funds, the backbone of India's liquidity starved capital market, pumped in a record $10.7 billion in the stock market in 2005 and have already bought shares worth over $4 billion in the current calendar year.

Enthused by the surging equity valuations, the overseas funds have invested a whopping $339.30 million in the first trading week of the current month, as against an investment of $117.90 million in April.