Mumbai, Jan 2: After being corralled for close to four years, the snorting bulls rampaged through the bourses today sending the sensex — the 30-scrip index that best reflects the mood of the stock market — soaring past the 6000-mark.
For the first time in history, the sensex closed above the magical mark at 6,026.59, up 1.88 per cent or 111.12 points over the previous day. Earlier, it hit an intra-day peak of 6,034.38.
At 12.31 pm today, the mood turned euphoric at the 73-year-old Pheroze Jeejeebhoy Towers —which houses the Bombay Stock Exchange — when the sensex crossed 6000 as domestic and foreign investors swarmed in to scoop up stocks across the board.
In a 24-day bull rally the index has gone from 5000 to 6000.
The sensex continued to yo-yo in a small range during mid-afternoon, making market players wonder whether history would be created today. In the end, it was.
The sensex had first crossed that mark on February 11, 2000, when it touched 6,005.85. However, it closed that day at 5,933.56 — the highest closing till today.
Almost 252 million shares changed hands in today’s frenzied trading on the BSE.
“We are standing on Mount Everest,” said a triumphant Arun Kejriwal of Kejriwal Research and Investor Services.
The index is just a little shy of its all-time peak — 6,150.69 in intra-day trading on February 14, 2000 — and the market expects that level to be scaled very soon.
The Nifty — the National Stock Exchange’s popular index of 50 stocks — also leapt to an all-time high on the back of the relentless buying spree. The Nifty put on 2.03 per cent to close at 1,951.10.
Will the rally sustain' The market brushed the question away with disdain: already several brokerages have come out with glowing forecasts saying that the sensex will close anywhere between 6500 and 7500 points this calendar year, with some even talking of 8000 as a possibility.
Bull rallies are built on irrational exuberance, but market watchers say this time it has been predicated on several feel-good factors: the 8.4 per cent economic growth in July-September, improvement in relations with Pakistan, surge in steel prices, the government’s plan to offload its stake in state-owned petroleum companies, and a stream of good corporate performances.
“The economy will do even better (than 8.4 per cent in the second quarter) in the coming months,” finance minister Jaswant Singh said in a Doordarshan interview late tonight.
Singh said the surge in the sensex past 6000 was a reflection of the strong economic fundamentals.
Investments by foreign institutional investors have provided the ballast for the rally. They shovelled Rs 30,899 crore into Indian bourses in 2003.
The spectacular rise in equity values today has seen investors’ wealth measured by market capitalisation swell by Rs 37,274 crore.
Analysts are advising retail investors to show caution before taking fresh positions in stocks as valuations appear stretched.