The Telegraph
Since 1st March, 1999
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Eight steps to eighteen
Sensex betters its own single-day record

Mumbai, Oct. 9: The sensex roared past 18000 today — rising another 1000 points in an eight-day blitz.

Market mavens said there were two new reasons for the rally: first, the scare of an early election seemed to recede after reports that the UPA and Left leaders would meet again on October 22 to break a stalemate; and second, the buzz on the Street that Reliance Industries would make a bold announcement — either a stock split or a bonus – at the annual general meeting on Friday.

The third factor — the deluge of dollars — provided a sustained ballast to the rally as the bellwether index rose 789 points, the largest single-day gain, to close at 18280.24. The 4.5 per cent gain over Monday’s close puts another Rs 2,12,656 crore into investors’ wallets.

The largest single-day gain before today was on September 19, when the sensex jumped 653.63 points to 16322.75.

It was also the day that the sensex oscillated a 1000 points between the day’s low and its high as overseas investors sparked a buying frenzy in equities led by Reliance Industries. Foreign institutional investors have pumped more than $3.5 billion since September 26 when the index hit 17000.

After opening at 17402.24 and hitting the day’s low of 17287.19, the index surged to a record high of 18327.42.

While scaling 18000, the sensex recorded its second fastest 1000-point journey. Just last month, it leapt from 16000 to 17000 in six days.

“The sharp upward movement came after the news that the UPA-Left committee will meet again. This led to a feeling in the market that the problems over the nuclear deal with the US will be sorted out and that the Left will not withdraw support immediately,” Seshadri Bharathan, director (stockbroking) at Dawnay Day AV Securities, told The Telegraph.

For the markets which recovered after a 282-point fall on Monday, a flow of good news from New Delhi is crucial as it waits for the start of the second-quarter earnings season that begins on Thursday when IT giant Infosys announces its results. Many analysts expect corporate India to report a robust set of numbers though local brokerage Motilal Oswal has predicted the worst profit growth in the last seven quarters.

Harendar Kumar, head of research at ICICI direct, said today’s climb was led by the market’s sherpas — the Reliance pack. Brokers here said rumours of a stock split and a bonus ignited the RIL scrip which leapt Rs 183.50 to Rs 2,600.45.

Stocks from Anil Ambani’s group also resumed their upward journey. All the sectoral indices on the BSE ended in the green, with the oil and gas index recording the sharpest rise of 6.51 per cent.

Today’s surge has made the Ambani brothers arguably the richest in the world. The market value of the shareholdings of the two brothers stands at $91.41 billion, far ahead of even the Walton family of Wal-Mart.

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