The Hindu Business Line : Bharti Tele, L&T, Maruti lead Sensex surge

WITH oil prices easing off and continued buying support from foreign institutional investors and mutual funds, the stock markets continued to sizzle and the indices moved further north.

On a day of unbridled bullishness in the market, the indices opened strong and remained steady.

The Sensex zoomed to a 97.2-point gain on Friday to close at 8,380.96. This 1.17-per cent rise in the 30-stock index was led by heavy buying in counters such as Bharti Tele, Maruti Udyog and Larsen and Toubro. Bharti Tele gained 5.77 per cent to close at Rs 362.80. Both Maruti Udyog and L&T closed trade with gains of over 3 per cent.

At the NSE, the Nifty rose 1.13 per cent, with a 28.4-point gain and closed at 2,552.35.

Market participants say unlike the last few months when FIIs were the sole big buyers, mutual funds too have started taking significant positions in the market now. The Securities and Exchange Board of India's (SEBI) recent notification allowing mutual funds full access to the futures and options segment has helped buoy sentiment further.

SEBI data indicates that FIIs have been net buyers of over Rs 2,880 crore so far this month. Mutual funds (MFs) have bought equity worth Rs 1,639.57 crore in September. In fact, in the last six weeks, starting August 1, MFs have invested a total of Rs 5,042 crore. In comparison, they were net sellers to the tune of Rs 1,311 crore in June and July.

Fund managers, who were wary of FII liquidity drying up and market valuations becoming expensive in June and July, are now forced to re-look at ideal valuations for the Indian markets. "Perspectives have changed and, with continued buying by FIIs, we have to now view this market in terms of momentum and not just valuations. After watching from the ringside in June and July, MFs have decided that postponing market entry is not a viable choice anymore," said a fund manager.

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