The Hindu : Business : Sensex scales 13000

Online edition of India's National Newspaper
Tuesday, Oct 31, 2006
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Business

Sensex scales 13000

Special Correspondent

Excellent corporate results, FII inflows aided the bull-run

PHOTO: AFP

JOYOUS OCCASION: Stockbrokers jump in joy while trading shares at a brokerage house in Mumbai on Monday. The benchmark Bombay Stock Exchange sensitive index, Sensex, has crossed the key 13000-mark for the first time.

MUMBAI: The Bombay Stock Exchange (BSE) sensitive index (Sensex) on Monday closed above the 13000-mark on the back of excellent half-yearly financial results announced by corporates.

The 30-share Sensex opened at 12925.43, touched a high of 13039.30 and a low of 12844.85 before closing at 13024.26, gaining 117.45 points over the previous close of 12906.81. On the National Stock Exchange (NSE), the 50-share Nifty gained 29.75 points to close at 3769.10.

Market participants pointed out that excellent half-yearly results, fall in oil prices, and flow of foreign funds aided the bull-run. Further, Indian markets ignored the weakness in Asian and European stock markets.

The Sensex gained 670.77 points or 5.4 per cent between October 11, the day when the earnings season started with Infosys' strong half-yearly results, and October 30.The Sensex has surged by 38.5 per cent this calendar year (till October).

The inflow from foreign institutional investors (FIIs) in October (till October 26) reached Rs. 6,499.20 crore. The FIIs pumped in Rs. 5,425 crore in September and Rs. 4,643 crore in August.

According to some analysts, funds moved to Indian markets following the U.S. Federal Reserve's decision to keep its interest rates unchanged. For the third straight time, the U.S. Federal Reserve on October 25 kept the interest rates unchanged at 5.25 per cent.

Market participants witnessed strong fund flow from the domestic financial institutions also. However, the total turnover on the BSE amounted to Rs. 3,715.86 crore, lower than last Friday's turnover of Rs. 4,266.81 crore. The Sensex gained 208 points on the last trading day to settle above the 12900-mark as participants crowded the counters of bluest of the blue-chip companies thanks to smooth rollover of the October derivatives contract.

Industry hails

Our New Delhi Correspondent writes:

Indian industry has welcomed the Bombay Stock Exchange benchmark Sensex crossing the 13000-point milestone for the first time and attributed this to impressive corporate performance and sustained economic growth.

"This new milestone reflects the continuing improvements in the fundamentals of the economy and the impressive corporate results that we are witnessing in the second quarter," said R. Seshasayee, President, Confederation of Indian Industry (CII).

In a statement, the CII said that what it found encouraging was the good performance at the micro and macro levels, boosting confidence, especially in large caps.

CII urged the Reserve Bank of India not to hike the interest rate on Tuesday in its review of monetary policy, especially in view of the Sensex having achieved another historic milestone.

"There is no need to provide any extra incentive to attract the FIIs at this point of time".

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