The Hindu : Business : Projections of win for Bush lift Sensex by 88 points

Online edition of India's National Newspaper
Thursday, Nov 04, 2004

Business

Business

Projections of win for Bush lift Sensex by 88 points

By Our Special Correspondent

MUMBAI, NOV. 3. The stock markets moved up on the back of liquidity to register a six-month high. While the rally was broad-based, technology stocks led the gains on the feeling that the expected re-election of the Republican candidate George W. Bush would be good for the Indian technology sector.

The Bombay Stock Exchange 30-share sensitive index moved up by 87.78 points (1.53 per cent) to close at 5842.54, its best close since April 27. In the last three sessions, the Sensex gained 177.27 points. The BSE IT sector index gained 63.62 points or 2.68 per cent to close at 2434.97 and the BSE banking index, Bankex 92.03 points or 3.32 points, to end at 2867.89. The National Stock Exchange Nifty gained 23.70 points (1.31 per cent) to close at 1837.40. Investors continued to buy in mid-cap stocks on the back of strong quarterly results.

"The U.S. elections are having only a marginal impact," said Abhay Aima, Country Head, Equities, HDFC Bank. "There is a lot of money coming in and it's a liquidity driven market", said Mr. Aima, adding "But one should be careful when there is lot of liquidity from overseas".

"Market was in a positive mood in the last few days. Today it started to rally with the technology stocks, looking at the possibility of Mr. Bush getting elected as the President of the U.S. again as it felt that Kerry would be against outsourcing the services to India. The rally further percolated down to banking, steel and cement stocks. I feel that it is more of a euphoria which was built-up around Mr. Bush's victory and the rally may not last long," said Ashok Ajmera, Chairman, Ajcon Global Services Ltd, a Mumbai based stock broking and corporate advisory services firm.

Markets ignored the negative side of the economy totally. "The markets are not even considering the negative impact of rising crude oil prices affecting the Indian economy badly. The fiscal deficit is soaring, the government's non-Plan expenditure is increasing rapidly, the interest rates are firming up, the inflation is going up and the negative impact of the poor monsoons is yet to come. Considering all these macro economic factors I feel that the markets are over-priced", Mr. Ajmera added.

With the expected victory of Mr. Bush, the international oil prices, which had fallen below $50 a barrel mark earlier this week, bounced back to above $50 a barrel in Asian trades today.

PTI reports:

Operators and retail investors, which were on a buying spree for the last couple of sessions, reportedly made heavy commitments in a number of blue chip counters.

Foreign institutional investors and local mutual funds, which have been consistent net buyers in during the past several sessions, were also believed to have made heavy purchases in key counters including SBI, Wipro, Grasim, Tata Steel, ONGC, ICICI Bank and HDFC.

The easing crude oil prices and encouraging quarterly results also boosted the sentiment. Auto stocks met with resistance due to profit taking by day-traders.

The broad-based BSE-100 index increased by 44.13 points to 3119.41.

The volume of business increased to Rs. 1,782.12 crores from Rs. 1,537.70 crores. Satyam Computer clocked the highest turnover of Rs. 137.12 crores followed by Infosys (Rs. 123 crores), SBI (Rs. 81.60 crores), RIL (Rs. 74.53 crores) and Tata Steel (Rs. 63.61 crores).

In the specified group, 146 including 24 index-based counters registered sharp to moderate gains.

Printer friendly page
Send this article to Friends by E-Mail

Business