Mumbai: The Bombay Stock Exchange’s benchmark index, Sensex, advanced for the seventh day, except an initial hiccup, on continued buying interest for index pivotals.
The benchmark index rose 1,258.07 points or 8.88%, to close at 15,422.05.
The seven-day gain is the longest since 7 December 2006—the longest winning streak in nine months.
The rally helped regain large part of the losses suffered by Indian stocks amid panic selling by foreign institutional investors (FIIs), as the mortgage crisis in the US raised fears of a credit crunch.
The previous instance when the Sensex moved up, seven days in a row, was during the period between 28 November and 7 December in 2006, when all the 30 stocks in the Sensex basket registered gains.
The stocks gained in the range of 1.05% to 23.5%.
The biggest gainer in the lot was Tata Steel Ltd, which rose by Rs131.65, or 23.50%, to close at Rs691.85.
Next to follow was Bharat Heavy Electricals Ltd (BHEL), which gained Rs279.35, or 16.81%, to close at Rs1,941 and National Thermal Power Corp. Ltd (NTPC), which gained Rs25.25, or 16.81%, to close at Rs185.35.
Ambuja Cements Ltd rose just Rs1.40, or 1.05%, to close at Rs134.15.
Next was Bharti Airtel Ltd, which gained Rs21, or 2.47%, to close at Rs871.45, and Cipla Ltd, which rose Rs4.15, or 2.47%, to close at Rs171.95.
“This rally has been supported by the positive developments in the US market, including recent assurances from Ben Bernanke and George W. Bush,” says Vijay L. Bhambhwani, chief executive of Bhambhwani Securities Pvt. Ltd, a domestic brokerage firm. “Technically, its hard to sustain this rally beyond seven to nine trading sessions. The Nifty could face resistance post 4,500 levels, as investors will go for profit-booking,” said Bhambhwani, who also is an expert in technical analysis.
Nifty, the key index of the National Stock Exchange, had closed at around 4,474 on Monday.
Markets will slip to further volatility in the short term, though the fundamentals remain strong, says Hiten Sampat, vice-president of equities at Parag Parikh Financial Advisory Services Ltd, a domestic boutique financial shop.
“The global bounce back in equity markets after the fall, supported the Sensex rally,” he said. “There are no positive cues for the short term except that the foreign institutional investors have stopped their selling spree and have started buying again. The FIIs hold over 40% of positions in the derivatives market on NSE. They can swing the market either ways.”