Mumbai, Oct. 29: Diwali arrived early at Dalal Street when a combination of bullish sentiments, good liquidity situation and positive global cues saw the sensex conquer the sixth 1000-point peak this year.
The index breached the 20000 milestone though it closed off the highs at 19977.67, registering the third biggest absolute gain of 734.50 points.
The journey from 19000 to 20000 has come in 11 sessions. But the fact that the benchmark index had first hit the 19000-mark on October 15 and later slumped to 17300 on worries relating to investments by foreign institutional investors (FIIs) is the real stunner. The index has staged a remarkable turnaround, which indicates the sheer velocity of the current bull run.
Market observers say the huge interest shown by FIIs, who have so far invested over $17 billion in domestic stocks, is the cornerstone of the rally.
“Despite the move to moderate capital flows, a foreign investor just cannot afford to ignore India now,’’ said an observer. He goes on to add that better-than-expected results from corporate India has only added to the bullish undertone.
The impact of a good corporate scorecard on the markets can be seen in the case of Larsen & Toubro (L&T), which has played a major role in the rally to 20000. Shares of the company, which have more than tripled this year, have risen by more than 22 per cent in the past two days after it announced spectacular results.
L&T now has the third highest weightage in the sensex after Reliance Industries Ltd and ICICI Bank.
The record close today saw investor wealth soar by Rs 1,96,738 crore. Market experts, however, differ on whether the retail investor has benefited from the rally.
“The retail investor has not made any money. He is feeling left out,” says Arun Kejriwal of KRIS. Kejriwal’s views are contradicted by Seshadri Bharathan of Dawnay Day AV Securities, who feels the retail investor too has made money.
India today became the 20th nation in the world to have seen its benchmark index enter the league of bourses that have touched the 20000-point milestone. As many as 32 indices across 19 countries have already crossed this mark.