The Telegraph
Since 1st March, 1999
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Reliance pulls sensex to a 14-month high

Mumbai, June 20: Hefty investments by foreign institutional investors (FIIs) today took the sensex to a new 14-month high of 3499.50. The rally was led by Reliance Industries (RIL), which surged on the back of unconfirmed news of a private placement coupled with positive expectations from its recent gas find.

The bullish trend was not limited to shares alone. The rupee also headed northward closing at a 27-month high while government security prices shot up.

Reliance led an old economy rally with speculations rife that Janus Fund was accumulating the shares. The share spurted Rs 12.05 to end at Rs 336.40. According to marketmen, with monsoon making a good beginning in the country, good days are ahead for the corporate sector.

However, brokers feel that though the equity markets are in a bullish zone, a correction over the next few days cannot be ruled out.

FIIs are also believed to have bought shares of BSES, Bajaj Auto and ITC among many others. Foreign investors have made net purchases exceeding $ 360 million in June so far.

Buying was also seen in Hindustan Lever (HLL) on news that the company will receive Rs 90 crore from the sale of its edible oils business.

Reflecting the upsurge, the benchmark 30-share index recovered smartly after a sharp fall at 3427.26 and rallied further past the 3500-mark before ending at 3499.50 as against yesterday's close of 3454.60, a rise of 44.90 points or 1.30 per cent.

The broad-based BSE-100 index advanced by 17.34 points to 1788.15 from the previous close of 1770.81.

However, the technology counters continued to remain under selling pressure following weak overnight finish in the US markets. The Dow Jones Industrial Average ended lower by 114.27 points and the Nasdaq composite index closed down by 28.50 yesterday.

Cement shares, in the limelight following Grasim’s acquisition of Larsen & Toubro's (L&T) cement business, today saw profit booking.

Steel shares saw some action on hopes that Prime Minister Atal Bihari Vajpayee’s visit to China may lead to the rise in import quotas of steel from India to that country. Last month, China had re-issued import quotas which would lead to India and other countries exporting over 9 million tonnes.

In the forex markets, the rupee gained for the fifth consecutive session and finished at a new 27-month high of Rs 46.54/55 per dollar on sustained dollar inflows. The Indian currency had yesterday closed at Rs 46.55/56 to a dollar.

The rupee has appreciated 19 paise this week, even as analysts aver that the currency is still undervalued by over 2-1/2 per cent on a trade-weighted basis

Bond yields fell to record lows as the market continued to expect a cut in the repo rate. The benchmark 10-year government bond ended at 5.72 per cent, from the previous close of 5.74 per cent.

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