The Hindu Business Line : Sensex scales 17,000

Business Daily from THE HINDU group of publications Thursday, Sep 27, 2007 ePaper

News

Features

Stocks

Open-End Mutual Fund

Cross Currency

Rates

Shipping

Ports

Archives

In Depth

Group Sites

The Hindu

The Hindu ePaper

Business Line

Business Line ePaper

Sportstar

Frontline

The Hindu eBooks

The Hindu Images

Home Page - Stock Markets
Markets - Performance
Sensex scales 17,000

Ends lower in volatile trading; FII buying continues

Our Bureau

Mumbai, Sept 26 The BSE Sensitive Index shot past the 17,000-mark on Wednesday, exactly one week and five trading sessions after it breached the 16,000 mark, making for the fastest 1,000-point gain in its history.

The Sensex rose to an intra day high of 17,073.87, with volatile trade leading it through a zigzag path to close lower at 16,921.39 (but a new high nevertheless). It gained 0.13 per cent or 21.85 points.

The broader-based 50-stock S&P CNX Nifty gained 0.73 per cent, closing at 4940.50.

It was FII buying that continued to fuel the unbroken seven-day rally, while domestic institutions and the very bewildered retail segment struck a cautionary path, both turning out to be net sellers in the market.

In September alone, FIIs have pumped in Rs 11,127.41 crore (net equity purchases) while domestic institutions have been net sellers for Rs 3,650.70 crore. Domestic institutions and the retail segment have been net sellers on every day of the current rally.

Increased liquidity following the US Fed rate cut continued to drive the markets. But how long would the rally last, was the question on everyone’s mind.

Wednesday also saw heavy short selling ahead of September futures which expire on Thursday; this accounted for the volatility, said Mr Manish Sonthalia, Vice-President, Equity Strategy, Motilal Oswal.

“There is only one day left, the positions to be rolled over are still large, the mood is bullish and the sentiment is positive, but there is hesitancy in creating fresh positions. Everyone wants somebody else to take the lead,” said Mr Arun Kejriwal who heads Kejriwal Research and Information Services.

“It might be hot money for the short term, then it is a thing to be cautious about,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets.

“It would be better if markets spend some time at this level and demonstrate some stability rather than rising steeply in a short time,” added Mr Sonthalia.

IT stocks lead

Wednesday’s gains were led by IT stocks which, having moved contrary to the rally so far, now saw value buying. The top Sensex gainers were Satyam (3.45 per cent), Wipro (4.33 per cent) and TCS (3.88 per cent). Among the indices too, BSE IT was the largest gainer, rallying 3.53 per cent.

“The BSE Bankex rose 1.89 per cent on the hope that the RBI will cut interest rates in October. Traditionally it is also a good season for banks as credit offtake in the second half of the year increases,” said a senior official with a large broking firm. Trading was also marked by good profit taking in realty and other sectors. BSE Realty fell by 1.23 per cent. The Oil & Gas, Auto and FMCG indices declined. Sixteen of the Sensex stocks declined while 14 advanced.

“However, volatility in the short term cannot be ruled out. At the current levels, we would advise investors to hold onto their fundamentally strong investments and take advantage of the current market rise,” Mr Dinesh Thakkar, Chairman and Managing Director, Angel Broking.