The Telegraph
Since 1st March, 1999
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Conquest in stealth

Mumbai, Feb. 6: The sensex scaled 10,000 ' the magical peak it had been trying to clamber all of last week ' but the ecstatic moment arrived so suddenly that brokers and investors were caught by surprise.

The moment of truth came just 15 minutes before the close of trading when the sensex surged to 10,002.83, but then tumbled as investors scrambled to cash in on their gains.

No one had quite prepared for it: there were no cheerleaders to herald the event and the small band that had hung around all of last week had not shown up today.

Later, a few enthusiastic investors burst a round of firecrackers near the Bombay Stock Exchange, but it was clear that the sharp frisson of excitement was somehow missing.

The surge to Peak 10K came as a surprise as many had started to brace for a downward drift after seeing all the negative cues of last week: the fresh battle between the Ambani siblings, the scrap over airport modernisation and the growing tensions over Iran’s nuclear ambitions and the resultant impact that it would have on world crude prices.

The day began with the sensex opening marginally higher at 9746.09 and then it began the slow northward trek. It was at 3.14 pm that the index breached 10,000 to touch a new intra-trade record high of 10002.83 before ending the day at an all-time closing peak of 9980.42 against Friday’s close of 9742.58, a net rise of 237.84 points or 2.44 per cent.

This is the biggest gain for the benchmark index after September 26, 2005, when it had risen by 256.32 points.

Market capitalisation swelled today by Rs 370 billion to Rs 26.09 trillion ' a rise of 1.43 per cent over Friday’s close.

Foreign institutional investors (FIIs) have continued to funnel cash into the market even as new investors from the Gulf and Japan have come in.

Although the key index ended off the peak at 9980.42, there was an air of quiet confidence among investors that the country’s growth story is intact. This faith has been triggered by the robust performance of the economy, which is growing at over 7.5 per cent and the cracking numbers corporate India has churned out this financial year.

The FIIs have pumped in $900 million so far this calendar year after a record $10.7 billion in 2005. However, they aren’t the only ones buying. Mutual funds, which have raised close to Rs 9,000 crore through new schemes, are waiting to make big-time purchases.

“One of the key highlights in this bull rally is that it is not led by the FIIs alone. There are mutual funds,” says an analyst from a foreign brokerage.

Many sounded a word of caution for retail investors. D.D. Sharma, head of equity research at Anand Rathi Securities, said the market is unlikely to run up dramatically from the current level.

“It may rise by 200 to 400 points in the short term, but a significant increase seems difficult at this stage as the valuations are stretched,” he added.

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