The Hindu Business Line : Nifty breaches 5,000 mark

Mumbai, Sept. 27 While continued FII buying drove the Sensex and Nifty to close past landmark levels, some signs of wariness were beginning to show on Thursday.

More than half the stocks (52.15 per cent) traded on the BSE closed lower on Thursday.

The development is in keeping with the trend of the week. With the exception of Wednesday, declines have outnumbered advances right through the week.

“There is always this disbelief when markets touch an all-time high; and the rise was narrow as the market breadth was negative. Only a few stocks pulled up the market,” said Mr Mugunthan Siva, Chief Investment Officer, Optimix, an investment solutions provider.

For the record, the Sensex closed at 17,150.56 gaining 1.35 per cent, and the Nifty, breaching 5,000 for the first time, closed at 5,000.55, gaining 1.22 per cent.

“Today was the expiry date for futures and the rise was the cumulative effect of short covering coupled with some fresh buying by FIIs,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

Net FII buys on the two exchanges amounted to Rs 2,226.85 crore, sharply higher from Wednesday (Rs 727.99 crore). Domestic institutions were net sellers at Rs 311.42 crore (Rs 701.43 crore).

Retail investors were massive sellers on Thursday, with their net sales for the day at Rs 880.64 crore, according to BSE records. On Tuesday and Wednesday, they had been net sellers at 114.01 crore and Rs 19.74 crore, respectively.

While all the BSE sectoral indices except for FMCG advanced, the BSE-MidCap declined by 0.28 per cent.

Metal and IT indices led Thursday’s rally, gaining 3.14 per cent and 3.19 per cent respectively. Higher prices on London Metal Exchange accounted for the first, while indications that the rupee is coming off its recent nine-year high led to a rally in the latter.

There was much apprehension among marketmen about the short term.

“Owing to heavy inflows from FIIs, we crossed this landmark, but there is bound to be a correction sometime next week, owing to the steep rise in the past couple of days,” said Mr Jignesh Desai, Head of Institutional Sales, SBICAP Securities.

But the long-term outlook remained positive. “On the back of a healthy rollover, the October futures closed at a premium indicating positivity for the next month”, said Mr Siva.

“Valuations, while not cheap, are still reasonable and further rate cuts and higher flows could boost the market further,” said Mr Sandeep Nanda, Executive Vice-President, Sharekhan Ltd.