The Hindu Business Line : Sensex rebounds on fund buying

STRONG buying support from institutional investors in the afternoon propped up major stock indices that were looking lustreless in early trade on Tuesday.

The buying in late trade helped the BSE benchmark, the Sensex, surge nearly a per cent to close at its all-time high of 6132.97. The 30-share index closed at 6067.76 on Monday. The 50-share S&P CNX Nifty of the NSE closed at 1963.60, a rise of about 1 per cent from its previous close of 1945.60.

A dealer with a domestic broking house said even though the Sensex opened with a gap at 6084, it fell to a low of 6011. The market traded in a range for most of mid-day and early afternoon trade. However, news that a Pakistani investment authority had invited Gail India to help set up a gas network in that country brought a surge of interest in the PSU's stock. Foreign institutional buying gradually fuelled minor rallies in Infosys, Gail, Reliance Industries and some automobile companies. Domestic drugmakers such as Cipla, Ranbaxy and Dr Reddy's were also attracting attention. Momentum gathered thereafter, taking the Sensex to its record close.

FIIs invested a net Rs 173 crore in stocks on Monday.

The comfort was, perhaps, reflected in bank stock valuations, which have run up quite a bit over the past few days and continued to rise on Tuesday. The BSE's Bankex that tracks bank stocks' movement rose 1.11 per cent or nearly 34 points to close at 3056.51.

The BSE PSU index was the only one to lose ground on Tuesday, shedding 41 points or about 1 per cent to close at 4189.76.

A technical analyst said the Sensex had strength to rally to 6400 levels and was supported at 6050 on the lower side.

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