Mumbai, Dec. 29: The Bombay Stock Exchange (BSE) today topped the 5800-mark, fuelling optimism that the stock boom would soon propel it past 6000 points after more than three years. The 30-share index wound down to a shade below 5800, to 5797.33 points, at the close.
The 98-point gain was driven by hopes of glowing third-quarter corporate scorecards and the steady stream of good tidings on the way the economy has shaped up. It was the index’s highest close since February 24, 2000.
“We are comfortable on so many fronts, be it corporate performance, the economy, interest rates and valuations. The market is therefore, relatively comfortable at its present levels compared with the earlier bull markets,” an analyst said.
In today’s trading, buying was spread across the board with technology and FMCG scrips jumping into the fray. These were out of the bull rally till now. Market analysts expect companies from both these sectors to report better performances in the third quarter of the current year, results of which are to be announced shortly.
Rapid buying was seen in the cement, steel, banks, automobile, PSUs and shipping counters. The sensex began on a firm footing at 5725.44 compared with the previous close of 5699.24.
Market analysts added that retail investors and operators were enthused by the continued-buying from foreign institutional investors (FIIs) who have picked up shares worth over Rs 5000 crore in the current month.
The shares of Indraprastha Gas surged close to 20 per cent to finish at Rs 142.50 over its previous close of Rs 119.20. Market watchers said this was due to large buying orders pouring from FIIs and mutual funds that were not successful in obtaining shares from its IPO.
Of the 30 scrips in the sensex, smart gains were witnessed in 24 that included heavyweights like Reliance Industries, Hindustan Lever, State Bank of India, Tata Motors, Tisco, ITC, Oil and Natural Gas Corporation, HDFC Bank, Larsen & Toubro and Satyam Computers.
Analysts said while cement shares were firm on hopes of a price rise, steel shares extended their gains after Tisco’s proposed move to hike prices of the commodity in January.
The volume of business was relatively low at Rs 2,297.30 crore from Rs 2,301.74 crore on Friday. Satyam Computers was the top-traded share with a turnover of Rs 110.03 crore followed by Tisco (Rs 88.94 crore), Indraprastha Gas (Rs 83.37 crore) and Reliance Industries (Rs 78.03 crore).
With today’s gain, the sensex is less than 400 points away from its all-time high of 6150.69 recorded on February 14, 2000. The sharp gain seen in recent times has led many to conclude that the key index will breach the 6000-mark in the first week of January, following which a correction is expected.
A Merrill Lynch report has raised the index target for December 2004 to 6500 due to a stronger-than-expected flow from new investors and a better performance of heavyweights.