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Mumbai, March 7: The party continued on Dalal Street today as foreign institutional investors, fresh from the weekend break, scooped up shares, sending the sensex to dizzy heights.
The bellwether index pierced the 6900-mark for the first time in history, hitting an intra-day high of 6902.49 after opening firm at 6863.58. Although profit-taking pared some of the gains later in the day, the 30-share BSE sensitive index managed to close at a record peak of 6878.98, a rise of 29.50 points over last Friday?s close of 6849.48.
?The momentum is there in this liquidity-driven rally,? said a portfolio manager affiliated to a foreign bank.
Experts are, however, wary of an imminent correction. Whether it will happen before or after the key index pierces the 7000-mark is the question on everyone?s mind.
Mutual funds, which have raked in huge sums of money through new issues, are willing to wait and watch. They are sitting on a cash pile estimated at Rs 4,000 crore raised through new issues and appear to be in no hurry to invest it.
Meanwhile, FIIs are now getting more ambitious. JP Morgan, for instance, today said it is raising the bar for the sensex to 8000 from its previous forecast of 7000.
?There are three drivers behind this upgrade. Evidence of a shift in local savings from cash and bonds to equities, positive earnings revisions and a pro-reform budget and pro-reform measures announced prior to the budget,? JP Morgan said.
Foreign investors, including JP Morgan, have pumped in a whopping Rs 2,411 crore during the last week. They continued to make big purchases today, a broker said. ?Domestic funds and local operators also indulged in heavy buying activity which lifted the index to dizzy heights,? he added.
If the current trend continues, the sensex could easily breach the psychological barrier of 7000 points within a week's time, he said.
Buying spree was so strong that shares from every segment made good progress, which reflected the strong market fundamentals, another broker said.
But for a fall in select index-based scrips like Bhel, Bharti Tele, Grasim, HLL, HPCL, ITC, L&T, Maruti and Tata Motors, the index would have closed above the 6900-level, he added.
The heavy-weights that helped the index to shoot up were Reliance Industries (RIL), Reliance Energy (REL), ONGC, Ranbaxy, HDFC Bank, Infosys Tech, Hindalco, SBI and Tisco.
Meanwhile, 10 block deals in JCT worth 50 lakh shares were reported and Shakthi Sugars also saw four block deals of 4.5 lakh shares.
The broad-based BSE-100 index rose further by 21.03 points to close at 3709.17 from the last close of 3688.14.
The volume of business was marginally lower at Rs 3016.72 crore from last Friday's close of Rs 3115.58 crore.
Punjab National Bank remained the top traded scrip with the highest turnover of Rs 193.27 crore followed by Reliance Industries (Rs 142.65 crore).