The Sensex hit its first century of 2006 as fund managers - foreign and domestic - bought shares hand over fist, barrelling index past 9500 watermark for first time.
MUMBAI: The Sensex hit its first century of 2006 as fund managers - both foreign and domestic - bought shares hand over fist, barrelling the index past the 9500 watermark for the first time.
As a result, investor wealth topped Rs 25 lakh crore. In the 18 sessions since December 9, 2005 - when the Sensex hit 9000 for the first time - investors have gained Rs 1,32,000 crore.
So what’s up? Nothing, if you ask the street hawks. Not an iota has changed.
The flurry of milestones passed, they say, have lost meaning. It’s better to focus on the road ahead.
At 10,000 and more? Hmmm, good question.
Statistically, reaching that summit would make the Sensex the 8th member of a rarefied club in the world — of exchanges sporting five-figure benchmarks.
The current members of the club are Dow Jones (US), Nikkei (Japan), Hang Seng (Hong Kong), Bovespa (Brazil), IPC (Mexico), S&P TSX Composite (Canada) and Mibtel (Italy).
Technical analyst Deepak Mohoni of trendwatchindia.com believes India is leading the world markets of late, rather than following it.
“If we take the whole of 2005, the Indian markets performed better than two-thirds of markets world over (out of a sample size of more than 50 markets). But taking the last two months of the year on a standalone basis, just 5% of world markets performed better than us. This means we have been taking the lead of late, rather than following world markets,” he said.
For the record, the Sensex closed at a lifetime high of 9,539.37 points on Tuesday, a gain of 149.23 points or 1.59%.
Activity in the derivatives segment has also been building up significantly.
“The flare-up is really strong, which indicates a lot of speculative activity,” said Sandeep Shenoy, head of research at Pioneer Intermediaries.
He says there is no specific “2006” reason for the upsurge, there is no change in the India story. “The trend of the recent past continues.”
Shenoy said there was talk about FII allocations slowing down in January, but these have been belied.
FIIs bought at a daily average of Rs 542 crore between December 9 and January 2, while mutual funds were daily average net sellers by Rs 63 crore. This has been attributed to redemption pressures faced by mutual funds, with the markets at such dizzying highs.
“Also, speculation is building up because the advance tax numbers have been very good - meaning corporates are doing well - plus, there is the expectation on Infosys results, which are due on January 11,” said Shenoy.
The Nifty also closed at its lifetime high of 2883.35 points, a gain of 1.67% from its previous close. Besides, the BSE PSU, Midcap, Auto, Bankex, Capital Goods, FMCG and Healthcare indices also closed at new highs.
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