Cautious Sensex closes 24 pts up

The NSE S & P CNX Nifty Index ended 8 points higher at 1,550.55. Despite last-minute gains, the undertone of the market appeared cautious. The last-minute recovery in the Sensex is seen as more of a technical development. The Sensex faces a strong resistance at the 5,000-level in any case. Extremely narrow ranges were the feature of the day for most stocks all through the session.

Apparently, the strong overnight gains in the US markets, hopes of easing oil prices and the satisfactory progress of the southwest monsoon have failed to spur the market. While stocks opened higher this morning, the market declined immediately in the absence of a follow-up buying amid fears that foreign funds may not buy in a big way unless the government clearly spelled out its economic agenda. Fresh buying in the last half-hour’s trade helped the market end with a decent gain.

Investors feel that the government’s emphasis on the infrastructure sector is nothing new. Earlier indications —statements from the Prime Minister and the finance minister and from the President on economic growth — have not enthused investors to make fresh bets.

‘‘The market is interested in knowing how the government plans to finance its infrastructure plans,’’ said BSE dealer R A Podar.

Meanwhile, foreign institutional investors (FIIs) turned sellers on June 4, pulling out Rs 41.40 crore in equities after putting in Rs 579.80 crore in the last five trading sessions. FIIs turned net buyers recently after withdrawing Rs 3,246.90 crore in the month of May. Reliance Energy (up 4.26 pc to Rs 560.60) firmed up from an intra-day low of Rs 534.50 on speculative buying. Bharti Tele-Ventures (up 3.80pc to Rs 146.25) climbed on sustained value buying after the recent weakness.

Tata Motors (up 2.82pc to Rs 406.70) emerged higher after the company announced a 36pc rise in vehicle sales in May 2004. Other automobile pivotals Maruti Udyog (up 3.45pc to Rs 397.85) and Hero Honda Motor (up 2.55pc to Rs 480.90) made significant gains.