Mumbai, Feb. 3: The sensex soared past the 6600-mark today as investors buoyed by the increase in foreign investment in telecom scrambled to scoop up shares. The move is seen as a sign that reforms are on track, and more could be expected in the Budget for 2005-06.
What has been a bigger propeller is the return of foreign institutional investors (FIIs), who have been net buyers to the tune of Rs 895 crore early this week. Attention has now turned to the data for Wednesday ' the day sensex lost 22 points ' which showed that FIIs made purchases worth a whopping Rs 1,374 crore ($312.4 million).
Other positives for the market have been the cool-off in crude prices and Wednesday's decision by global rating agency Standard & Poor's to upgrade the country's rating to BB+. 'This shows that the interest of FIIs is increasing in the midst of a pre-budget rally,' a broker averred.
As the day began, buying was brisk with the sensex opening firm at 6550.75 points. The index moved up to its intra-day high of 6632.50 before ending the day at 6619.97 in a gain of 89.91 points over its last close of 6530.06.
The positive sentiment could be gauged from the fact that all the sectoral indices on Dalal Street finished in the positive territory. The charge, of course, was led by the PSU index.
Though most sectors shaped up well, it was commodity and power firms that were the day's biggest gainers. Steel and cement saw massive buying on hopes that a pick-up in the economy would boost demand for the two products.
Analysts said in the case of cement, most companies have reported excellent January demand. Some firms even hiked prices today in the southern region. Among these shares, Grasim shot up Rs 14.50 to Rs 1,345.95, ACC was stronger by Rs 9.65 at Rs 363.30 and Gujarat Ambuja Cements jumped by Rs 4.70 to Rs 457.50.
Buyers were also seen chasing power stocks after the Centre cleared the National Electricity Policy on Wednesday. The interest was not limited to power utilities; even equipment firms like Bhel and ABB sizzled.
The banking industry came into focus after S&P upgraded the foreign currency rating of the country. Most of the leading banks have come up with encouraging numbers. BSE's Bankex was the second largest gainer, recording an increase of 53.58 points at 3753.57.
The volume of business on BSE declined to Rs 2,452.99 crore from Rs 3,914.81 crore. SBI clocked the highest turnover of Rs 134.39 crore followed by Tisco, Dhampur Sugar, RIL and SAIL.