Thursday, October 1, 2009

Bulls on rampage again

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Mushrooming inflows from foreign institutional investors (FIIs) and a strong results expectation for the second quarter helped the Sensex to continue on the upswing as it breached the 17,000 mark after 16 months on Wednesday.

The Sensex rose 1.6 per cent or 274 points to close at 17,127, while the more broadbased NSE Nifty rose 1.5 per cent or 77 points to close at 5,084.

Riding the momentum, the initial public offering (IPO) of Oil India Ltd saw a strong listing after a dismal performance of other high-profile IPOs such as NHPC and Adani Power.

Globally, India was the world’s biggest gainer on Wednesday. With FIIs investing more than Rs 64,000 crore since March 2009 into the Indian equity markets, the Sensex left behind most of the markets across the world in terms of return. Sensex return stands at 110 per cent since March 9 when it closed at a low of 8,160.

While FIIs movement is one factor, experts feel that the market is expecting a good result which has also resulted into this fast movement at the Sensex.

“The market has factored in a strong result for the second quarter especially for the banking sector which is expected to see a drop in its non-performing asset amidst a reviving economic situation,” said Amitabh Chakraborty, president equities, Religare Enterprises.

As Sensex crossed 17,000 mark on Wednesday, the banking and auto indices rose the most at Bombay Stock Exchange (BSE), at 3.7 per cent and 2.1 per cent respectively.

It is not just the benchmark index that has risen. Seven of 10 companies outperformed the Sensex, with only three showing negative returns. Jindal South West, the biggest gainer among the broader BSE 500, rose over 700 per cent.

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