Sensex spurts 117 points

MUMBAI, AUG 4: The stock markets across the country staged a spirited rally on Wednesday as share prices rose smartly due to renewed buyi...

MUMBAI, AUG 4: The stock markets across the country staged a spirited rally on Wednesday as share prices rose smartly due to renewed buying by foreign funds and local operators. The benchmark Bombay Stock Exchange Sensitive Index Sensex rose above the 4600-mark and closed with a sizeable gain of 117 points. The Samp;P CNX Nifty on the National Stock Exchange, on the other hand, closed at 1326.40 points against Tuesday8217;s 1285.05, showing a net gain of 41.35 points.

With the 117-point rally on Wednesday, the market expectation has changed substantially. For the market which was under the bear grip for some days, the jump was a good break to reach a new high. 8220;For Thursday, we are expecting an intra-day correction which can take the Sensex down to the 4590-4595 level and thereafter the Sensex would rally. In the next six trading sessions we expect to see the Sensex between 5050 and 5100-mark,8221; said an analyst.

Sensex opened firm at 4548.75 on Wednesday and gradually moved upwards to the day8217;s high of4644.20 before closing at 4644.07 with a sizeable gain of 116.77 points or 2.58 per cent as against previous closing of 4527.30. The BSE-100 index also flared up by 51.19 points to 2036.43 from previous close of 1985.24.

Brokers said marketmen, who turned cautious after the announcement of discouraging quarterly results by several corporates during past weeks, created fresh positions in line with the purchases by FIIs. After a gap, FIIs 8211; with fresh fund allocations for the month of August at their disposal 8211; bought shares of cement and pharmaceutical industries. The domestic financial institutions also made purchases in some cyclical stocks besides software counters like Pentafour Software, Infosys Tech, NIIT and Satyam computers. Excellent working results by cement major Gujarat Ambuja Cement which posted a net of Rs 151 crore for the fiscal ended June 1999 against Rs 131 crore boosted the sentiment.

With the total change in the overall market sentiment, market players are expecting another bull run onthe bourses which can take the markets to a record high. Specified scrips like Mahindra, Ranbaxy, Ashok Leyland, ABB, Ballarpur, ITC Bhadra and Sun Pharma hit the upper price band after exhausting the daily limit. Of the 148 traded specified shares, 126 registered sharp to moderate gains while only 17 were marginally down and five remained unchanged.

Leading investment firm HSBC Securities had recently said the BSE Sensex would touch the 6,000 mark by the end of current fiscal in the wake of revival of the Indian economy and restructuring undertaken by top companies. 8220;Worst seems to be behind us, be it the Asian crisis, the domestic economy or the political situation. Based on these factors, we expect the Sensex to head towards the 6,000 mark by march 2000,quot; it said.

Apart from this, it expects the markets to move up due to improved earnings profits, expected to grow by around 21 per cent, re-rating of stocks due to restructuring undertaken by various companies and improved liquidity through massiveinflow of funds by foreign institutional investors. HSBC feels that the current rally is different from the rallies in the past. quot;The fact that the market returns for July-December, for each of the last five years, have been negative, averaging at about 10 per cent. We, however believe it is different this time aroundquot;.