MUMBAI, June 13: Bulls seem to be back in their business. After lying low for several months, bulls have started charging once again, taking the fancied Sensex above the 4,000 level on Friday. The bull run on the scam-hit stock markets a quiet affair this time is being led by foreign institutional investors (FIIs).Coming as it does on the Rs 1,200 crore CRB scam and poor corporate performance, the continuing rally on the markets has surprised marketmen. With today's gain, the Sensex has climbed 221.72 points since June 2 when the Sensex was placed at 3,808.27. Marketmen see this development as a sign of renewed bull run that now led to the Sensex crossing the 4,000 levels to 4029.99 on the Bombay Stock Exchange (BSE) on Friday.The massive FII buying also led to a surge in volumes with the BSE and the National Stock Exchange clocking a combined turnover of Rs 3,504 crore. While BSE recorded a turnover of Rs 989.49 crore, the NSE volume surged to Rs 2,515.52 crore.This is the second time in the current year that the Sensex is crossing the 4,000 mark. The sensex had breached the 4,000-level on March 5 and touched an intra-day high of 4,029.56, after the market-friendly budget proposals were announced by the Finance Minister P Chidambaram. It, however, closed lower at 3,940.99.Now that the Sensex has crossed 4,000, traders feel it could touch 5,000 by the year end with intermittant dips for necessary correction. ``The bull run has gained momentum,'' said an official with Kotak Securities, adding, ``The short-term gain would see index cross the 4,000 levels and touch 5,000 by the end of this year.''According to Pravin Shah of Morgan Stanley, the tax cuts and the exemption on dividends to investors should help to revive the capital market (both primary and secondary). ``This should lead to higher credit offtake as most credit sanctions are tied to equity funding. In turn, this should provide a boost to investment demand,'' he said.Moreover, the corporate performance was not as bad as expected. Many companies like Tata Tea, Larsen & Toubro, Bajaj Auto, Telco, ITC and Reliance had come out with higher profits and sales. With no apparent reasons for a bearish phase and brushing aside the overall gloom following the poor corporate results, FIIs and a section of speculators have resorted to buying of heavy weight index based stocks.FIIs who have made cumulative investments of nearly $ 8 billion were seen purchasing stocks like Mahindra & Mahindra, Hindustan Lever, Hindustan Petroleum, Bharat Petroleum and ITC. Several FERA shares attracted FII buying amidst expectations of better prospects in the coming year. Brokers generally feel once the A and B1 group shares appreciate to some extent, FIIs will have to search for good B2 group shares. ``Petroleum, FERA, software and other blue-chip PSU shares were in demand,'' market sources said.Said a BSE member, ``We have witnessed an increase in the participation level. Today's trading session has seen an increase in the advances over the declines along with the indepth concentrated business at the B1 segment. This is a healthy sign for the sustained upward movement of the indices. FIIs are quoting big difference in the prices to finalise the deals.'' ``FIIs could not take advantage of the situation following the political uncertainty in March and April. The downfall of Deve Gowda government kept them away. Now with the Gujral government firmly in saddle, FIIs are slowly turning aggressive in the Indian markets. The smooth passage of the budget was the first signal for FIIs to come back,'' said an FII source.He said FIIs and other big investors are now likely to shift their attention to the equity market from the debt market following the drop in interest rates. However, marketmen seem to have forgotten about the United Front steering committee meeting on June 15 which will decide on the impending hike in the petroleum products.
