Sensex zooms on PSU push
The BSE benchmark Sensex surged over 495 points to 14,744.92 today on heavy buying by funds, with the benchmark witnessing the biggest weekly gain since May on reports that the government is planning financial sector reforms and greater foreign investment in insurance.business Updated: Jul 17, 2009 20:42 IST
A disheartened market, which misread Finance Minister Pranab Mukherjee’s budget as one with no reforms spiked on Tuesday with disinvestment back on the government agenda. First reported by Hindustan Times on Tuesday, the government has put disinvestment of public sector undertakings (PSUs) in which it has more than 85 per cent holding.
The 494 point (3.5 per cent) rise in the Sensex on Friday —the highest after Budget 2009-10 —was only the climax to a week which saw it rise by 9.2 per cent or 1,240 points. The drivers for this gain: auto and banking stocks, which were up 5.2 per cent and 4.8 per cent respectively.
The Nifty rose by 3.4 per cent on Friday to close at 4,375.
While the disinvestments announcement cheered domestic investors, foreign institutional investors (FIIs) too pumped in more money on the growing confidence. Since Tuesday they have invested Rs 1,966 crore in the Indian market.
“The markets rose on several factors that include policy announcement on disinvestments, FIIs fund flow into the emerging markets and the overall rise in the stock market worldwide,” said Manish Sonthalia, portfolio manager, Motilal Oswal Financial Services.
While the Indian market gained sharply, it got an initial support from the global market movement as the major Asian markets closed in the green following the Dow Jones in US that closed with a gain of 1.1 per cent.