FIIs take U-turn,invest Rs 5,000 cr plus in March

* Bulls rally for 7th day in a row,take Sensex to a 10-week high at 19,290.18 points.

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After pulling out over Rs 16,000 crore in January and February,foreign institutional investors (FIIs) are slowly returning to Dalal Street. FIIs made net investments of over Rs 5,000 crore in March,helping bulls extend their winning streak for the seventh straight session of trade and attain a 10-week closing high on Wednesday.

The comeback of foreign funds boosted the sentiment again during the day. As per the BSE data,FIIs pulled out Rs 8,903 crore in January and Rs 7,422 crore in February but invested Rs 5,070 crore in March so far. Besides,cooling oil prices,strong global markets,fading chances of further rate hikes and hopes for improved relations between India and Pakistan aided the rally. The BSE 30-share Sensex rose by another 169.38 points or 0.89 per cent to 19,290.18,its highest closing since January 12,2011. The S&P CNX Nifty moved up by 51.30 points or 0.89 per cent to 5,787.65.

Bulls took cues from the international equity markets and robust FII inflows. Also,the much-awaited technical breakout above the 200-DMA this week seems to have sparked further buying. F&O indicators have also improved,with the bears having to cover their shorts ahead of the settlement on Thursday, said an analyst.

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With this,the Sensex has risen 5.95 per cent in the last one week. Cooling of oil prices from recent 2-1/2-year high helped ease inflation worries,aiding rally in stocks. Oil declined as signs of rising US crude supplies stoked speculation that demand may falter in the worlds biggest consumer of the commodity.

US crude futures were down 52 cents a barrel or 0.50 per cent to $104.27 a barrel. Prices had climbed 23 per cent since anti-government protests began on February 15,2011 in Libya,cutting output in Africas third-largest producer by two-thirds.

Wednesdays rally was broad-based. Except the BSE FMCG index,all the other sector indices logged gains. The market breadth was strong as small and mid-cap stocks participated in the rally. For a change,the broader indices outpaced gains in the large-cap peers after being on the sidelines for the past few sessions.

The BSE Small-Cap and the BSE Mid-Cap indices climbed 2.2 per cent and 1.5 per cent respectively. The bullish trend in the Indian equities was in line with the broad-based global rally in stocks and signs that Japanese companies are recovering from the aftereffects of earthquake and tsunami. The US economy also remains on track for a gradual recovery.

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After a series of strong days,the Indian market may witness some cooling at some point and consolidate around 5700 levels. A breach of 5800 on a sustainable basis might confirm a short-term trend reversal. Global risk appetite also seems to be improving slowly but surely, said Amar Ambani,Head of Research,IIFL.

Bull Run

FIIs have have pumped in Rs 4,343.34 crore (close to $1billion) in last six trading sessions to March 29

Cooling oil prices,strong global markets,fading chances of further rate hikes and hopes for improved relations between India and Pakistan aided the rally

Interest rate sensitive counters from consumer durables,realty,banking and auto segments attracted good buying on easing global crude oil prices