Sensex at 17K and Nifty at 5K, yet small & mid-cap shares continue poor run

Bulls have tightened their grip on pivotals, pushing up key indices further. Continuing its one-way upward journey,

Bulls have tightened their grip on pivotals, pushing up key indices further. Continuing its one-way upward journey, the Sensex, which breached the 17,000 mark on Wednesday, closed above that level and the Nifty Index scaled the 5,000 level for the first time.

The BSE Sensex rose 229 points (1.35 per cent) to close at 17,150.56, an all-time closing high. The S&P CNX Nifty, the tope index of the NSE, was up 60.05 points (1.22 per cent) at 5,000.55, an all-time closing high. It struck an all time high of 5, 016.40 in late trade. The Nifty took

a little under 10 months to travel from from 4,000 to 5,000, after first hitting the 4,000 mark on December 1, 2006.

From a recent low of 13,989.11 on August 21, 2007, the Sensex surged 3,161.45 points (22.59 per cent) in just 27 trading sessions to 17,150.56 on September 27. The rally is being spearheaded by foreign institutional investors (FIIs) who have pumped $2 billion into the Indian markets in the last seven sessions.

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According to market circles, the rally is restricted to top blue chip shares while hundreds of small and medium shares have missed the bull run. Though the Sensex shot up by 1.35 per cent, the BSE Mid-Cap index was down 0.28 per cent. The BSE Small-Cap index rose just 0.19 per cent. “Small and mid-cap shares are underperforming the Sensex. The entire market is not witnessing a bull run,” said a BSE dealer.

According to a fund manager, domestic bourses rose as part of the rally across global markets as weak US economic data reinforced expectations of another interest rate cut from the Federal Reserve, following the steep half-point reduction to 4.75 per cent last week. The Hang Seng (up 2.40 per cent), Japan’s Nikkei (up 2.41 per cent), Taiwan Weighted (up 1.69 per cent), Singapore’s Straits Times (up 1.78 per cent) and South Korea’s Seoul Composite (up 1.36 per cent) edged higher.

Reliance Energy (REL) surged 8 per cent while IT stocks rallied for the second day in a row after the central bank’s recent measures to tame the appreciating rupee. Infosys Technologies moved up 5.25 per cent.