Bulls roar as Sensex soars 180 points

Rare Enterprises partner Rakesh Jhunjhunwala said the Indian economy continues to be robust, and that the markets would witness a long-term secular growth uptrend. “The structural and secular bull run of the markets will continue. There is a secular growth uptrend, and sustained corporate earnings momentum at reasonable valuations will drive this growth,” he said.

For the week, the BSE Sensex gained 235.85 points and the NSE Nifty rose 83 points. This rise has come after a 500-point plus fall in the Sensex in the past two weeks. The market has recovered smartly in the last three sessions on value buying after recent weakness.

Stocks had declined steadily after the BSE Sensex and NSE Nifty touched their new highs of 6,696.31 and 2,120.15 respectively in the intra-day trades on January 4, 2005.

“We are seeing new foreign funds making purchases over the last few days, even as some of the older ones have been booking profits,” said Manish Karkera, head of institutional sales at Geojit Securities, adding that the focus was on frontline stocks.

On Friday, stocks in banking, power, cement, pharma, technology and automobile sectors rose across the board. While bargain hunting continued in bluechips after recent weakness, the sentiment on the market was supported by substantial rollover of derivatives contracts.

Despite recent outflow of foreign funds, the undertone of the market appeared optimistic on the back of strong quarterly results. As per initial estimates, profits of corporates had shot up by over 30 per cent and sales by 23 per cent in the third quarter ended December 2004.

Besides, expectations are started building up over the Union Budget, which will be announced late next month.

Jhunjhunwala said the earnings growth could be as high as 20 per cent annually. He added that increased money flows into equities from foreign and domestic funds alike, is inevitable, and that the underexposure in Indian equities would get corrected over a period of time.

CCEA on Thursday gave an in-principle approval for listing of unlisted profitable public sector companies with a net worth of more than Rs 200 crore.

It also approved the sale of government’s minority shareholding in profitable PSUs in conjuction with a public issue of fresh equity by the PSE concerned or independently by the government. “This is good news for the market,” said a BSE dealer.