The Hindu Business Line : Sensex crosses 8,500; mid, small cap stocks down

THE BSE Sensex ended at a new high of 8,500 points on Tuesday as liquidity continued to drive stock prices to higher levels, but the upward movement in shares was limited.

The momentum of Tuesday's upturn was limited as small cap and mid-cap stocks fell, indicating nervousness among investors in these categories.

Brokers said that the strong momentum is seen continuing as there is buying support, which is helping stock prices sustain gains and hit new highs.

Key stock indices Sensex and Nifty opened weak in the morning, but buying in stocks such as ICICI Bank, HDFC Bank, Infosys, Satyam Computer, and Reliance Industries pushed them to new highs.

The Sensex, which touched the day's high of 8,515, closed at 8,500.28, up 55.44 points (0.66 per cent); on the NSE, the S&P CNX Nifty closed at 2,578, up 10.9 points (0.42 per cent).

But the mid-cap index of the NSE and the BSE fell and the small cap index of BSE also was down.

But there was strong buying in bank stocks on the expectation that credit growth would continue and interest rates would remain stable. This was seen from the rise in the Bankex index of the BSE by 2.07 per cent and 1.63 per cent in the NSE.

The advance-decline ratio was negative, with 2,020 stocks declining and 620 advancing in today's trading on the BSE. Even in the BSE Sensex, 14 stocks advanced while 16 declined.

Brokers said that at such high levels, short-term volatility is likely to persist; they have recommended a valuation-based stock-specific approach and advise caution.

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