Sensex sees sharpest surge since Satyam
Improving investor sentiment globally coupled with short covering by market players in India pushed up the BSE Sensex by 5 per cent on Friday, the highest since December 10, and after the Satyam fiasco broke on December 16.business Updated: Mar 13, 2009 21:15 IST
Improving investor sentiment globally coupled with short covering by market players in India pushed up the Bombay Stock Exchange Sensex by 5 per cent on Friday — the highest since December 10, and after the Satyam fiasco broke on December 16.
“The bad news came from the financial sector but now globally the banks are signalling improvement that is building positive sentiment overall,” said Aseem Dhru chief executive officer, HDFC Securities.
Dow Jones in America gained 3.5 per cent on Thursday and the Asian and European markets followed it on Friday as the Hang Seng of Hong Kong went up by 4.4 per cent and Japan’s Nikkei 225 rose by 5.2 per cent. Even though global economic environment helped, the head of a large mutual fund house who did not wish to be named, said that there are manipulators in the market.
“Short covering is happening in the market as people had built in short positions,” he said. “The margins between Nifty index and Nifty futures have narrowed down significantly as buying is more in futures than in cash.”
The gain in the Indian market is also on the back of supportive domestic factors acting in a globally improving economic environment.
The realty index was a major gainer as it rose by 7.6 per cent, followed by metal and banking indices, which gained 6.3 and 5.9 per cent respectively.
“The GDP numbers for the third quarter will be revised upwards as the IIP numbers have been done and sectors like cement and auto are getting strong now,” said Sanjay Sinha, chief executive officer, DBS Cholamandalam AMC. “Also election spending and falling real estate prices will increase spending and consumption.”
While the spurt was sudden, stability is conditional. “If the global situation remains stable the growth in markets may sustain,” said Sinha.