The Telegraph
Since 1st March, 1999
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Stocks cruise along, FIIs stay on board

Mumbai, Nov. 4: The sensex topped 5100 today, a day after it flew past 5000 points, but the mood was more circumspect and foreign funds less aggressive buyers than they have been at the height of the recent rally.

Dalal Street swung in a tight band of 80 points before mild profit booking forced the sensex to close at 5097.84. The volume of business breasted the Rs 3000-crore mark at Rs 3206.84 crore against Rs 2856.22 crore on Monday.

Through the best part of the day, the 30-share index moved between 5135.00 and 5055.57 before ending 34.81 points, or 0.69 per cent, higher than its previous finish. Investors appeared cautious as they waited for someone to take the initiative to give the rally a new thrust.

The all-round buying support from institutions sent shares, including that of State Bank of India, on the climb. The largest bank had taken a beating on Monday.

Though foreign institutional investors (FIIs) were muted in their buying, some brokers said they went for prized picks.

Foreign funds have pumped in a record $1.5 billion in shares. This is their highest investment since they were allowed to put their money in Indian stocks a decade ago. It takes their net purchases to $ 4.6 billion this year, six times as much as the previous financial year.

Mirroring this torrent, the sensex has risen from 3800 in April to the current levels of 5000 plus, prompting fund managers to warn of a correction any moment.

The Reserve Bank pumped up the sentiment on Monday, when it said in its busy-season credit policy that the growth rate this year would be 6.5-7.0 per cent. This was up from the 6 per cent that it saw six months back.

Cement and pharmaceutical stocks were among the day’s best performers. The former firmed up on reports of robust October demand, while the latter got a booster dose from Dr Reddy’s drug approval. Cement despatches grew to 45.14 lakh tonnes in October against 41.67 lakh tonnes in the corresponding period of last fiscal, a sign of a consolidating economic recovery.

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