FIIs push Sensex past 5,600

The bull bandwagon seems to be unstoppable. Fresh gains in blue chip stocks lifted the market to a new 4-month high on Tuesday as buying res...

The bull bandwagon seems to be unstoppable. Fresh gains in blue chip stocks lifted the market to a new 4-month high on Tuesday as buying resumed after Monday’s correction. While gains were seen in the old as well as new economy stocks, pharma stocks also contributed to the well-being in the market.

After initial weakness, the Sensex ended with a solid gain of 60.11 points at 5,605.93, its best close since May 7, 2004. The broader 50-share NSE S&P CNX Nifty index gained 21.40 points to end at 1,750.20.

With today’s 60-point surge, Sensex has now risen 307.70 points or 5.8 per cent in the last eight trading sessions from 5,298.23 on September 9, 2004. And from a low of 5,033.69 on August 23, 2004, the barometer index has swelled 572.24 points.

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The market mood was optimistic on the back of sustained foreign fund inflows amid expectations of strong quarterly results from the corporates. “Monsoon has been better than earlier anticipated and expectations have started building up over the July-September 2004 quarter. The July-September 2004 quarter results from the corporate sector are likely to be strong. There’s still strong demand in the economy despite high inflation and high international oil prices,” said BSE dealer Venkatesh Aiyer.

Foreign investors are the major drivers of the market. FIIs put in a net Rs 481 crore on Friday (September 17), the highest daily inflow in months. They put in Rs 148.50 crore on Thursday (September 16), Rs 104.50 crore on Wednesday (September 15) and Rs 183.60 crore on Tuesday (September 14). Thanks to the recent surge, FII inflow for September has reached Rs 1,630.30 crore (till September 17).

The bull rally has also led to a sharp rise in volumes. The BSE clocked a turnover of Rs 1,926 crore, as against Monday’s Rs 1,843 crore. It was much higher than the average daily turnover of Rs 1747 crore recorded in the last three months. “The past few days have seen turnover spiral, with frontline stocks participating in the rally which until recently was restricted to small and mid-cap stocks,” said a broker.

The Q2 results season will kick-start from October 10-11, 2004. Infosys flags off the results season by announcing its earnings on the 10th or 11th of the month.