The Hindu Business Line : Funds drive Sensex past 5,500 mark

THE bullish sentiment continued on the bourses with the Sensex crossing another psychological barrier of 5,500 mark on increased buying both from domestic as well as foreign investors.

Sensex ended with a gain of 86.35 points (1.58 per cent) to close at 5,541.35. The NSE S&P CNX Nifty index rose by 22.45 points (1.28 per cent) to settle at 1,778.55.

With today's rise, the Sensex has gained 225.55 points (4.24 per cent) for the week and the benchmark index has gained 428.32 points (nearly 8 per cent) in the last nine trading sessions.

In today's trading, the market displayed marked strength throughout the session on the back of sustained buying interest.

Mr Sandeep Shenoy, Strategist at stock broking firm Pioneer Intermediaries, said, "Several index funds and MIPs have raised funds and now they have to deploy them in the market and this is driving the stock prices, especially index stocks."

According to market sources, Reliance Mutual Fund had mopped around Rs 470 crore in its monthly income plan (MIP), HDFC Mutual Fund raised around Rs 920 crore in its MIP. Even index funds are witnessing increased inflow in December.

Mr Shenoy said the economic fundamentals of the economy are good and the commodities prices are ruling firm and this is also adding to the bullish sentiment.

Buying was observed almost across the board. Old economy - cement, automobile and power - pivotals traded firm in anticipation of yet another impressive quarter, while technology stocks traded higher following overnight gains in the US markets. Heavyweights Reliance Industries, State Bank of India and Hindustan Lever also contributed to the gains of the Sensex. Action was also continued in mid-cap side counters. However, Mr Ambarish Baliga, Vice-President, Karvy Stock Broking, said next week, the market is likely to remain subdued due to the Christmas holiday.

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