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Stocks soar as FII bandwagon roars

Mumbai, Dec. 1: The markets roared off the block today as shares of infotech and smokestack firms propelled the BSE sensex to a 44-month high of 5160.85 points in a 116-point gain fuelled by sustained buying support.

Brisk buying by investors saw shares pole-vaulting to new 52-week highs. Foreign institutional investors (FIIs) continued to drive the rally, with the fresh crop of Sebi figures showing they pumped in Rs 216 crore on Friday.

“Sustained buying since last Thursday saw the bulls charging in with a vengeance,” said Arun Kejriwal of Kejriwal Research & Investment Services. Through last week, the sensex gained 200 points; today, in the space of a single session, it has already put on 116.

The breadth of the buying was evident from the fact that 28 of the 30 stocks that make up the index ended higher; only two shares found themselves in negative territory. Mirroring the sensex, the BSE-100 shot up 53.43 points at 2647.77 from its previous finish of 2594.34. The highest the sensex has gone is 6150 points, in February 2000. It was followed by a scam-triggered meltdown.

Information technology shares went from strength to strength, and operators shrugged off growing worries of a backlash against outsourcing-driven infotech firms.

Digital Globalsoft was in the spotlight this afternoon, a day after its parent Hewlett-Packard announcing its decision to buy out the entire public stake at a price of Rs 750; the share closed 11.85 per cent higher. Infosys Technologies rose 5.1 per cent to Rs 5,176.35.

The BSE-IT index zoomed 96.28 points, or 5.32 per cent, at 1904.70 compared with its last close of 1808.42.

Among the blue-chips, Tata Motors gained 3.9 per cent at Rs 424.90. Shares of Maruti Udyog, Hero Honda and Bajaj Auto raced up, the advance fuelled by impressive sales numbers dished out for the last month.

The intensity with which FIIs renewed purchases took market pundits by surprise. The sense had been that foreign funds would sell heavily in December, a month when fund managers pack up for holidays, to cope with redemption pressures. The fact that local mutual funds are scouring bourses for mid-cap stocks is a sign that the year-end rigours are not limited to FIIs.

Foreign investors have already injected a massive Rs 20,000 crore into markets this year. And, unlike other years, December might see more inflows than outflows.

Some operators said it was the fence-mending initiatives by India and Pakistan that are at the heart of the rally. Foreign investors lay great store by such efforts.

Today, the two sides took the first step to allow Indian planes to glide in Pakistan’s air-space. Mirroring the euphoria in India, the 100-share Karachi index also gained an impressive 4.8 per cent at 4,263.06 points.

Rupee hardens

The rupee hit its highest point in 10 days, ending at 45.73 against the dollar in a jump of 12 paise over its last close. The gains came on the back of bunched-up greenback inflows and also reflected the US currency’s weakness against key global units. It is within striking distance of 45.63 recorded at the close of trade on November 19.

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