The Hindu : Business : Sensex hits 15000-mark

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Saturday, Jul 07, 2007
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Sensex hits 15000-mark

Special Correspondent

Information technology stocks provide the thrust

— PHOTO: AP

A MAGICAL MARK: An electronic display board shows the benchmark index, Sensex, at 15000 outside the Bombay Stock Exchange building in Mumbai on Friday.

MUMBAI: The benchmark BSE 30-Share Sensitive Index (Sensex) breached the 15,000-mark, to reach a record high of 15007.22, for the first time intra-day on Friday before closing at 14964.12, which was 102.23 points higher from its previous close. The Sensex oscillated in a range of 180 points for the day. “The rally has been sharp in the last two weeks which was little unexpected,” said A. K. Sridhar, Executive Director, UTI Asset Management Company Pvt Ltd. “But even at this valuation the market is trading at 18.5 PE based on 2007-08 earnings.

However, this is definitely not considered as stretched. But any subsequent movement in index will depend on the first quarter results, the immediate inflation numbers and the expected interest rate increases in the short term. Considering there is plenty of liquidity in the system the chances of steep downward corrections may not happen. The upside is purely dependent on companies’ results and stock selection is going to be an extremely challenging task,” Mr. Sridhar added.

Information Technology (IT) shares dominated the market throughout the day followed by capital goods and oil and gas stocks. IT stocks led the rally on fresh buying after the rupee turned weak on Friday against the dollar due to suspected intervention by the central bank and dollar buying by the oil and gas companies. However, banking stocks ended in the negative territory on profit booking.

Milestones

The market took seven months for the Sensex to move from the 14,000-mark to 15,000-mark. The Sensex had first hit 14,000 on December 5, 2006. In contrast, it had taken just 26 trading sessions for the Sensex to reach the 14,000 mark after it had hit 13,000 level on October 30, 2006. “We are having a cautious view because of open interest stock futures is relatively quite high. So we expect a correction which is around the corner,” said Vijay Kanchan, Vice-President - Derivates, Prabhudas Leeladhar, a leading market participant.

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