Sensex rises for fifth straight day; gains may fizzle
The Sensex rose for the fifth session in a row, gaining 0.7% today to their highest close in two months, as investors picked up bargains following the sell-out seen so far this year, but dealers said the rally may soon fizzle out.business Updated: Mar 28, 2011 18:09 IST
The Sensex rose for the fifth session in a row, gaining 0.7% on Monday to their highest close in two months, as investors picked up bargains following the sell-out seen so far this year, but dealers said the rally may soon fizzle out.
Engineering and construction firm Larsen & Toubro topped the gainers' list, closing 2.6% higher on upbeat broker comments. It is still down more than 17% in 2011.
"...we believe these near-term concerns are now priced in and the valuations are attractive," UBS said in a note while reiterating its "buy" rating on the stock.
"In our view, L&T remains the key play on India's structurally strong infrastructure growth story."
The 30-share benchmark BSE index firmed 0.68% or 127.50 points to 18,943.14, its highest close since Jan. 25, with two-third of its components advancing.
"We (the index) have not performed well all this while in this year. So, it is an attempt to catch up," said Prasanth Prabhakaran, president of retail broking at IIFL.
"I do not think the rally will last for long. A lot of questions like persistently high inflation, firm crude oil prices are unanswered."
Market breadth, however, favoured losers, indicating weak overall strength. They outnumbered gainers 1.4 to 1, while 349 million shares were traded on the BSE, higher than the 90-day average daily volume of 321 million shares.
The benchmark index is down 7.6% in 2011, weighed down by foreign funds' withdrawal of $1.7 billion from Indian equities in the period.
It has underperformed MSCI's broader emerging markets equities index which has gained 2.4% year-to-date.
The benchmark has gained 6.3% in March, after shedding 2.8% in January and 10.6% last month.
Top mobile operator Bharti Airtel jumped 2.6% after JPMorgan upgraded the leading mobile operator to "overweight" from "neutral" and raised its target price to 410 rupees from 370 rupees.
Lenders marched ahead on expectations the economic growth story in world's second-fastest growing major economy was here to stay, and on positive outlook surrounding demand for loans.
Top lender State Bank of India climbed 1.4%, while rivals ICICI Bank and HDFC Bank firmed 0.8% and 1.3% respectively.
Mortgage lender Housing Development Finance Corp rose 0.6%.
Energy major Reliance Industries closed 0.3% lower after the upstream regulator said the company may not touch peak gas output of 80 million cubic metre a day from its east coast deep water block by April 2012.