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Journalism of Courage
MUMBAI, Feb 2: The spectacular recovery on various Asian stock markets recharged bulls on Indian markets with the 30-share Sensitive index (Sensex) jumping by 130 points on Monday.
Sensex spurted by nearly 4 per cent to close at 3,354.80 points as compared to Thursday’s close of 3,224.36 points. The National Stock Exchange’s 50-share index (Nifty) also gained 13.15 points to close at 976.60 points. The GDR (global depository receipt) markets also looked up on Monday, adding to the general positive sentiment.
“Confidence is returning with the Asian recovery," said an official with the Unit Trust of India (UTI), the country’s largest mutual fund, adding, “Our market had been moving in sympathy with the Asian markets. So, this is partly responsible for the rise.”
“Psychologically the market received a tremendous boost,” said a BSE broker Dinesh Valji, referring to the Asian surge. “It eased FII (foreign institutional investor) selling pressure.” Brokers said signs of easier money conditions alsoprovided succors to the stock markets. Many funds had ploughed cash into money markets over the past two weeks lured by sharp rise in interest rates.
Traders said FIIs were selective buyers but the market’s main driver was local speculators. "This is a speculative foray," said Vijay Pandya, director at Classic Share and Stock Brokers. Even though the rally saw stock prices zoom, there was not much of a volume in trading. At the BSE, the total turnover was just Rs 760.20 crore, with the turnover of the B1 group stocks dipping by over 50 per cent. ITC topped the turnover chart, registering Rs 185.12 crore, followed by Tata Tea at Rs 129.76 crore and SBI at Rs 87.33 crore.
Uncertainty over who would win in national elections which begin on February 16 and run through to March 7 would discourage fresh investment, analysts said.
Meanwhile, shares of Indian affiliates of British pharmaceutical firms Glaxo Wellcome Plc and SmithKline Beecham Plc rose on news that the two firms were in talks for a possiblemerger. SmithKline Beecham Pharmaceuticals firmed 7 per cent to close at Rs 579.50 while SmithKline gained 9% to close at Rs 381.25.
