The Hindu : Business : Overseas funds drive Sensex, Nifty to historic highs

Online edition of India's National Newspaper
Thursday, Dec 16, 2004

Business

Business

Overseas funds drive Sensex, Nifty to historic highs

By Oommen A. Ninan

MUMBAI, DEC. 15. The stock market indices, the Bombay Stock Exchange 30-share sensitive index (Sensex) and the National Stock Exchange's Nifty closed at their all time highs, driven by overseas funds.

The mood in the market was extremely bullish on the back of heavy inflow of overseas funds, which is being supported by economic fundamentals which has been reflected in strong industrial growth numbers reported recently.

A number of stocks touched their lifetime highs today. However, mid-cap stocks displayed a mixed trend. While the Sensex closed up 76.76 points or 1.21 per cent at 6402.29 after touching an intra-day high of 6423.27, the Nifty closed at 2028.70, up by 21.90 points or 1.09 per cent compared to its previous closing.

"The market has run up sharply and is being fuelled by overseas liquidity. Short-term investors need to be very careful.

However, long-term fundamentals of the economy remain intact and long-term investors should come through the Systematic Investment Plan (SIP) route," said Ved Prakash Chaturvedi, Chief Executive Officer, Tata Mutual Fund.

However, while about 1,126 shares advanced, around 1,248 shares declined and 56 shares remained unchanged.

The spurt in the market also came with high volumes on the bourses. Shares valued at Rs. 2,462.70 crores were traded on the BSE today against Rs. 2,107.68 crores on Tuesday.

ndicating a strong trend, BSETeck moved up by 41.83 points to 1722.44, BSE 100 by 35.11 points to 3448.83, BSE 200 by 8.35 points to 851.62, BSE 500 by 23.86 points to 2662.67, BSEPSU by 21.20 points to 4255.55 and the BankEX by 2.42 points to 3482.74.

Buying interest was seen almost across the board among blue chip companies, barring shares of Reliance Group companies. Telecom, media and technology stocks were in the limelight.

Foreign funds have already purchased shares valued at (net) Rs. 4,109.40 crores between December 1 and 13, taking their net investments for 2004 to around $7.9 billion, a record for any single year since FIIs were allowed to invest in India in 1992.

Shares of Zee flared up by 11 per cent to Rs. 178.05. Bharati Tele, Maruti, Bajaj Auto, Hero Honda and Tata Motors gained further ground on sustained buying. Infosys, Wipro, Satyam shown strong upward trends.

In otherwise firm market, the Reliance Industries Ltd (RIL), a heavyweight in the indices ended in the red on selling pressure amid the ongoing controversy over the ownership issue between the Ambani brothers.

As the dollar weakened globally, the rupee strengthened against the dollar today at close.

The rupee closed strong at 44.03 a dollar against 44.11 on Tuesday.

However, the rupee opened weak in the morning, at 44.29 on the back of dollar recovered against major currencies as a response to the U.S. Fed's decision to raise rates. However, the rupee recovered towards the end as the dollar lost strength globally.

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