The Hindu Business Line : Sensex rises 110 points as global markets recover

RECOVERY in global equity markets helped Indian shares to rebound in today's trading with the Sensex gaining more than 100 points. However, the rupee breached the 44-mark against the US dollar on worries of rising oil prices.

Stocks opened strong and remained firm throughout the day on active buying. But brokers said that there was not much activity from institutional investors especially FIIs.

However, volumes in the market were high indicating large-scale investors' participation. Overall the breath of the market was positive as thenumber of shares advancing outnumbered the declines.

BSE Sensex rose 110.57 points (1.4 per cent) to close at 7,745. The S&P CNX Nifty rose 30.10 points (1.2 per cent) to 2,367.75.

Key indices in the Asia-Pacific region such as Hong Kong, Japan, Australia and South Korea gained between 0.5 per cent and 1.1 per cent. Key European indices in London, France and Germany also rose.

US crude, which touched an all-time high of $70.80 a barrel on Monday, fell below $68 as investors awaited news of damage to US oil installations and refineries.

Brokers said inflows from FIIs have slowed down as the valuations of the stock prices are high. They said that most of the stock gains are mainly in mid-cap and small-caps and in several of them the fundamentals are not justified.

"Stock prices are trading at a very high valuations and most of the buying is on herd mentality rather than fundamentals," said a dealer with a domestic broking firm.

He said his firm is advising its clients to book profits and sit on cash rather than buy new stocks.

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