Mumbai, Oct. 3: The sensex today rocketed to within 45 points of Peak 18000 as the market buzzed with reports that foreign investors were continuing to shovel dollars into the Indian markets.
But punters scooped up gains quickly sparking a mid-afternoon collapse. The market, however, quickly regained its composure after another jolting ride to end with a sprightly gain of over 518 points, or almost 3 per cent, at 17847.04 — a new closing high.
The index has gained in 11 sessions in a row and it has risen by 15 per cent since September 17. Market mavens say the foreign institutional investors (FIIs) have invested close to $4 billion in the past 10 sessions. So far in this calendar year, these investors have made net purchases of over $12 billion. However, there were some anxious moments for investors when equities plunged after a strong opening.
The BSE barometer opened firm at 17467.41 against Monday’s close of 17328.62. Though it gained more than 600 points after this strong start to a record intra-day high of 17953.07, sharp selling was observed in noon trades. Brokers observed that the fall was triggered by the FIIs, which started to book profits.
The index quickly tumbled to the day’s low of 17288.41. Just when it seemed that equities would end the day on a negative note, buying resumed and the benchmark index was back to the earlier levels of the day.
Tejas Doshi, head of research at Sushil Finance, told The Telegraph that the volatility in the domestic markets was also on account of a correction in some Asian indices like the Hang Seng. However, Doshi said the market fundamentals continue to look good and India Inc will benefit from the robust growth rates posted by the Indian economy.
While the second-quarter earnings season commences from October 11 when technology bellwether Infosys Technologies announces its results, analysts believe the IT pack will declare good numbers despite the strong surge in the value of the rupee vis-a-vis the dollar.
In fact, a foreign brokerage today raised growth estimates for Infosys in dollar terms. Hopes that other IT companies too will post good results saw brisk buying in many of these counters.
Heavyweights such as Reliance Industries also played a part in the rally. Giving it company were companies from the Anil D Ambani group that included Reliance Energy and Reliance Communications. The REL stock has been a smart mover in the past few sessions and this trend has rubbed off on other power stocks. Tata Power today rose by over 13 per cent on speculation that the company could also announce a value-unlocking initiative like REL.
Shares of DLF also soared on news that the real estate company had bagged a project in Bangalore.
The rally in stock markets had its impact on the forex markets as well where the rupee today rebounded sharply and washed out initial losses to close at a fresh 9-1/2 year high of 39.58 against the dollar despite the Reserve Bank’s intervention.