The Telegraph
Since 1st March, 1999
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Santa comes to markets early

Mumbai, Dec. 19: Santa Claus arrived early this year on markets, where stocks vaulted to a 45-month closing high and took the BSE sensex past 5550-mark today.

“It’s early Christmas. We are on such a good wicket,” says Ramesh Damani, a prominent Dalal Street broker. He was referring to the feel-good sentiment over the Indian economy pervading the markets.

The 30-share index closed 86.35 points, 1.58 per cent, higher at 5,541.35 points. This took to 4.2 per cent the gains this week alone. It is also the highest finish since April 11, 2000, when the benchmark stock barometer hit 5,541.54.

FIIs, who have been the driving forces of the rally, continue to be upbeat. Today, CLSA, a bulge-bracket fund, said in its that the Indian economy has consistently surprised on the upside. “Growth in 2003-04 is likely to be 7.5 per cent, the best in over six years.”

“The sentiment is bullish,” says Arun Kejriwal of Kejriwal Research and Investment Services. Everything seems to be moving, including the small-cap stocks. “Heavyweights like ONGC and Reliance, which form a bulk of the market cap are on a roll too,” he added.

The biggest boon of this break-neck rally has been the return of retail investors, who have started flocking back into the markets after a long time. The BSE sensex is now touted as being Asia’s second-best performer in 2003, having rallied 64.1 per cent this year.

The bourses have seen $758.2 million foreign fund inflow in this month till Wednesday.

FIIs have made net investments of $6.05 billion in shares so far in 2003, their highest annual inflows since foreign portfolio investments were allowed in India.

The heavy-weight index stocks pushed the market rally. Gainers outnumbered losers by 1,018 to 869 in heavy volumes of 22.3 crore shares traded today compared with 20.2 crore traded the previous day.

In the specified group, 116 including 24 index-based counters scored sharp to moderate gains, while 77 others closed with substantial losses.

Larsen & Toubro gained 8.3 per cent (Rs 38.20) to Rs 498.25 as the court-convened meeting on the proposed demerger of its cement unit was scheduled for February 3. Auto stocks also recorded new highs on expectations of strong earnings in the current quarter.

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