Bulls, led by foreign investors, have virtually taken over Dalal Street, taking the BSE Sensex to a new milestone of 5,500 for the first time after April 11, 2000. On Friday, the BSE Sensex shot up in euphoric buying by foreign funds amidst hopes that the strong economic growth would bring more foreign investments in 2004.Recording its eighth rise in the last nine sessions, Sensex ended with a solid gain of 86.35 points, or 1.58%, at 5,541.35. The National Stock Exchange S&P CNX Nifty index rose by 22.45 points to settle at 1,778.55.‘‘I am sure that the Sensex will hit the 6,500-point mark in the new year provided there is no major political upheaval and Union Budget continues to remain pro-reform,’’ says Venkatesh Aiyar, a BSE dealer. With Friday’s rise, the Sensex has gained 225.55 points, or 4.24%, for the week. The benchmark index has gained 428.32 points, or nearly 8%, in the last nine trading sessions.Investors’ wealth — or market capitalisation — jumped by Rs 15,000 crore to Rs 11,57,000 crore on Friday, thanks to foreign funds. Market cap has doubled in the last six months, making many investors richer by lakhs of rupees.For the year 2003, Sensex has risen 2,164.07 points, or 64%, making it one of the best performing indices in the world. The market displayed marked strength throughout the session on the back of sustained buying interest. Investors are confident that inflows by foreign funds would continue unabated as corporate profitability is expected to rise on strong economic growth and upgrade by rating firm Standard & Poor’s.“There is huge overseas money chasing local shares and traders are betting that the flows will only increase in the new year,” said a dealer, adding, “that optimism is based on strong earnings potential.”Foreign funds have played a key role in driving the market higher with net investments of $758.2 million till Wednesday this month. Offshore funds have made net investments of $6.05 billion in shares so far in 2003, their highest annual inflows since foreign portfolio investments were first allowed in India a decade ago.
