BackSensex rises past 18,000, pares gains at close
Sensex rises past 18,000, pares gains at close
PremiumMumbai: The Bombay Stock Exchange’s Sensex index on Wednesday climbed above 18,000 points and rose for the fourth straight session, fuelled by earnings optimism and mostly firm global equities.
Reliance Industries Ltd (RIL) and auto makers led the gains.
The 30-share index closed 0.16%, or 28.65 points, higher at 17,970.02, its best close since 19 February 2008. The Sensex rose to 18,047.86 in early deals, touching its highest level since 27 February 2008.
“There is strong support coming in at lower levels," said Jigar Shah, vice-president of equity sales at brokerage Motilal Oswal Securities Ltd. “People are optimistic that earnings and guidance will be good. So, there is nothing really negative to bring the market down."
Auto makers raced on expectations that demand would remain strong, helped by rising incomes. “Volume growth is expected to continue, driven by strong economic recovery, pent-up demand, increase in availability of finance and new product launches expanding the market," Motilal Oswal said in a note.
Tata Motors Ltd gained 2.4%, while Maruti Suzuki India Ltd rose 1.8%. Mahindra and Mahindra Ltd bucked the trend and lost 0.8%.
RIL, which has the highest weightage in the Sensex, rose 0.7% to Rs1,129.
Foreign funds have pumped in around $4.9 billion (around Rs21,760 crore) in Indian equities so far in 2010, encouraging the recent steep rally. But there are concerns that valuations may be stretched.
Financials edged lower as traders opted to lock gains after the recent rally. The sector index shed 0.4% after gaining nearly 3% over the last three sessions.
State Bank of India and ICICI Bank Ltd dropped 0.6% and 1.1%, respectively. Mortgage lender Housing Development Finance Corp. Ltd shed 0.7%.
Export-led outsourcers pulled back after the recent decline, as the rupee weakened after hitting fresh 19-month highs in early trade. The currency closed at 44.55 per dollar after hitting 44.31, its strongest since 8 September 2008.
Tata Consultancy Services Ltd and Wipro Ltd rose 0.5% and 0.1%, respectively, but bellwether Infosys Technologies Ltd dropped 0.2%.
Ambareesh Baliga, vice-president of Karvy Stock Broking Ltd, said investors were chasing shares in medium and small companies, driving them faster than the main index and possibly risking a bubble.
The BSE Mid-Cap and the BSE Small-Cap have gained 4.9% and 7.5%, respectively, so far in 2010, outperforming the Sensex that is up around 2.9%.
Elsewhere, global stocks inched close to 18-month highs with MSCI’s measure of world stocks rising 0.1% by 1053 GMT. MSCI’s measure of Asian markets other than Japan gained 0.7%, while the FTSEurofirst 300 index of top European shares edged 0.1% lower.
The 50-share Nifty index of the National Stock Exchange gained 0.2% to 5,374.65.
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