The Telegraph
Since 1st March, 1999
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Records tumble like ninepins
- Sensex atop Point 9000 for a brief while

Mumbai, Nov. 28: The sensex ' the main barometer of the stock market’s sentiment ' soared past Point 9000 for the first time on Monday, but slid at the close to fall heart-breakingly short of the psychological mark at 8994.94.

But even at this level it had made a gain of 1.2 per cent over the previous close and 17 per cent over the past month. Since June 20, when the sensex surged past 7000 after the Ambani brothers first announced the settlement to end their bitter battle, the index has climbed 2000 points in just over five months.

The surge quelled all speculation in the market that the foreign institutional investors (FIIs) were preparing to start taking their money off the table in anticipation of a sharp correction.

Amid an all-round conviction that the FII juggernaut would continue to roll through 2006, the 30-share BSE sensex breached the 9000-mark for the first time in its 20-year history to hit 9005.63 in intra-day trades.

The close marked yet another century from the key index as it revealed a huge 105.91 point rise over its last close. But more than this is the sheer magnitude of its ascent in this month and more particularly during the last few sessions.

On November 1, the index had closed at 7944.10. While it has thus gained by nearly 1051 points so far this month, nearly half of this climb has been accounted over the last six sessions during which it has spurted by a whopping 579.74 points or 11.53 per cent. It was on September 8 that the sensex had first crossed the 8000 level. Analysts say that while it has taken 53 sessions for the key index to hit the 8500 mark, it took only 45 days to move to 9000 from 8500.

The prime force behind the climb is the foreign institutional investors who have pumped in a record $8.5 billion into equities this month. Although they were net sellers during October, these investors have made a comeback during this month, attracted by robust fundamentals of the economy. Moreover, factors such as high crude oil prices and the prospects of rising interest rates, which could have weighed down on the markets have also abated, thus piquing investor interest.

An indication of the interest taken by FIIs is evident from the fact that even on Saturday, they were net investors to the tune of Rs 39 crore. “The FIIs usually take a holiday on Saturday. But given the attractiveness of the Indian markets even at these levels, they were buying on that day,” said a portfolio manager associated with a leading brokerage.

This kind of interest shown by the foreign investors, today goaded even local investors that comprised both operators and retail into buying shares. “Expectations are strong that there will be higher portfolio allocations next year,” he added.

Overseas stock market indices, particularly in the Asian markets, also closed strong and provided the ballast to the rally. While Japan’s nikkei, which firmed up by nearly 203 points, touched 14,900 for the first time since December 13, 2000, the Korean index also hit record levels. On the other hand, the Hang Seng gained 18.53 points, the Taiwan index by 75.64 points and Singapore Straits Times index by 12.81 points.

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