Sensex adds 311 pts; eyes 20-K mark

Both the indices closed at their highest levels since January 15,2008,while in intra-day trade they scaled their record peaks since January 17 in the same year.

The Sensex hit an intra-day high of 19,927.30 points,while Nifty peaked at 5,989.50 during the day.

The Sensex and Nifty had last traded above 20,000 and 6,000 points respectively on January 17,2008.

Interestingly,the future contracts of Nifty for September and October have already crossed the 6,000 level. Analysts said that the indices are all set to surpass these psychologically important levels in early morning trade on Tuesday,unless there are some unexpected negative global cues once the US market opens later in the evening.

“The rate at which market is rallying,surpassing that level would not be a difficult task,” Kotak Mahindra Old Mutual Life Insurance Chief Investment Officer Sudhakar Shanbhag said.

Market experts attributed today’s rally — the second consecutive day of uptrend — to continuing surge in foreign investment flows as also huge buying interest in blue-chips like Reliance Industries,ITC,L&T,Infosys as also financial sector majors like HDFC,HDFC Bank and ICICI Bank.

“The rally is fuelled by huge inflows from overseas fund houses as they see higher growth returns in emerging economies like India,where fundamentals are strong,” Shanbhag added.

Betting big on the Indian equity markets,foreign fund houses have invested over Rs 71,000 crore (USD 15.6 billion) so far this year and analysts believe that it will soon breach the record-figure of Rs 83,400 crore achieved in 2009.

FIIs play a major role in stock market and their movement (inflow and outflow) causes fluctuation in benchmark indices.

RIL,which holds the maximum weight in the Sensex,surged 1.24 per cent to close at Rs 1,039.70. FMCG major ITC zoomed nearly 5 per cent.

Banking stocks once again emerged as the favorite sector for FIIs and HDFC climbed 3.33 per cent,HDFC Bank 1.92 per cent and ICICI Bank 1.15 per cent. SBI rose 0.44 per cent.