Tags:
Journalism of Courage
Dalal Street made history on Tuesday. With a buying euphoria sweeping the markets, the benchmark Sensex ended at its all-time closing high of 6,234.29— showing a gain of 76.52 points or 1.24 per cent— thanks to huge foreign fund inflows.
The Sensex missed its all-time intra-day high of 6,249.60 by 1.17 points. For the month, the Sensex gained 562.02 points. The widely-tracked index last closed at an all-time high of 6,194 on January 14, 2004.
“Sustained FII buying in frontline stocks has been the key trigger for the rise in the market that lifted the Sensex to a new record high,” said Rajat Jain, CIO, Principal PNB Asset Management Company. Market circles said FIIs are flocking to the Indian market due to the fall in the dollar’s value abroad.
With FIIs pumping in dollars, the rupee also shot up to close at a recent high of 44.63. As a result, the foreign exchange kitty of the country had recently zoomed past the $125 billion mark. FIIs had already brought a whopping $7 billion into India in 2004, the highest in any year so far. “Very clearly, there’s a buoyancy in the market and it looks like it will be sustained … when the index will hit a new intra-day high is immaterial, as it is bound to happen sooner or later,” said Arun Kejriwal of KRIS Securities. Tuesday’s rally was triggered by frontline stocks. Even Reliance group stocks— which were hammered last week due to “ownership issues”— shot up in euphoric buying conditions.
Investors wealth —market capitalisation— also shot up. The market capitalisation (m-cap) of the BSE rose by around Rs 30,000 crore to Rs 14,81,701 crore on Tuesday.
|
I’m very happy: FM
|
|||||
|
New Delhi : Finance Minister P Chidambaram on Tuesday said he would be happy as long as the Sensex was driven by the fundamentals of economy. “I don’t react (on ups and downs of the market). As long as the Sensex is driven by the fundamentals of the economy, I am very happy,” he said, reacting to the surge in market index. |
|||||
Meanwhile, the broader 50-share S&P CNX Nifty index of the National Stock Exchange gained 19.15 points to end at 1.958.80. The Nifty is short of 23.35 points to its all-time closing high of 1,982.15 on January 14, 2004.
In fact, sustained inflow of funds from FIIs have even improved the volumes on domestic bourses. After recording an 15-month low average turnover of Rs 3,718.33 crore on the NSE, the average turnover in November 2004 rose to Rs 4,101.76 crore. “Liquidity is driving the market, but as we move higher and higher, the markets will remain volatile and only stocks with value and strong growth story will see interest,” said Rajat Jain.
“Though the Sensex crossed the 6,200 level, valuations are still cheap. There could be further flow into the Indian equity market,” said a fund manager with a leading hedge fund. On Monday, the FIIs bought equities worth Rs 498.20 crore. For the month till November 29, 2004, FIIs bought equities worth Rs 5,545.70 crore. The FII inflow of $6.97 billion in the current calendar year till date has been the highest-ever in any year. In 2003, the FIIs poured in $6.66 billion.
On Tuesday, the buying-spree saw five— auto, capital goods, healthcare, FMCG and metals— out of 10 sectoral indices on the BSE touching all-time high levels. The BSE Teck and BSE IT continued to surge to touch a new 52-week high levels.
