Sensex gets past 27,000, looks hungry for more

Tags: News

Narrowing CAD, inflow from retail investors boost market

The bull run in the market continued for the eighth consecutive day, taking BSE Sensex past the 27,000-mark for the first time as foreign funds bought frontline stocks.

Sentiment was boosted by the balance of payments being surplus for a third quarter, while the current account deficit (CAD) widened but stayed within comfort zone. CAD narrowed to $7.8 billion (1.7 per cent) from $21.8 billion (4.8 per cent) in the year-ago period.

The BSE Sensex, after touching a high of 27,-082.85, later settled at an all-time closing high of 27,019.39, up by 151.84 points, or 0.57 per cent. The NSE Nifty crossed 8,100 and finally closed at 8,083.05, up 55.35 points, or 0.69 per cent.

A Balasubramanian, CEO of Birla Sun Life Asset Management said, “Overall confidence level for equity remains good, which keeps flows intact. We have a long way to go, backed by earnings surprises and steady growth.”

“We would see domestic retail participation improving as we are seeing good inflows into equity schemes. I don’t see a major correction in the short term,” he added.

About 323 stocks touched a 52-week high including ACC, Bharti Airtel, Cipla, Dr Reddy's Laboratories, Mahindra & Mahindra, ICICI Bank, Hero MotoCorp, Maruti Suzuki, IOC, Lupin and Tech Mahindra.

The index was lifted by buying in pharma, oil and gas and auto stocks. Major index gainers were Cipla (up 5.23 per cent), Bharti Airtel (4.24 per cent), Sun Pharma, (2.50 per cent), HDFC Bank (2.01 per ce­nt), ONGC (1.15 per cent) and ITC (1.28 per cent).

Foreign investors, who have poured in $13 billion so far this year, continued their buying spree. FIIs were net investors to the tune of Rs 555 crore on Tuesday.

About 323 stocks touched a 52-week high including ACC, Bharti Airtel, Cipla, Dr Reddy's Laboratories, ICICI Bank, Hero MotoCorp, IOC, Lupin, Mahindra & Mahindra, Maruti Suzuki and Tech Mahindra.

The index was lifted by buying in pharma, oil and gas and auto stocks. Major index gainers were Cipla (up 5.23 per cent), Bharti Airtel (4.24 per cent), Sun Pharma, (2.50 per cent), HDFC Bank (2.01 per cent), ONGC (1.15 per cent) and ITC (1.28 per cent).

Vikram Dhawan, director at Equentis Capital said, “There are a lot of positives going for the India market, especially on the economic front, and foreign investors are bullish, so the fund flows with continue. The last 5 per cent of the rally is fuelled by buying in frontline stocks. This shows that it is long-term money that is coming in -- and that is the good news.”

However, there are fears that the market may correct in the short term as some investors may cream off profits.

Sanjeev Zarbade, vice president of private client group research at Kotak Securities commented, “Although the global cues were not very strong and economic data from the EU was weak, strong market sentiment carried the Sensex to record levels. It closed above 27,000 for the first time in its history. The sentiment has been very positive as investors are buying into the India story, which has seen some encouraging signs like improved GDP growth, likely funding support from Japan and soft crude prices. Having said that, while the market outlook is positive, investors need to be watchful of an impending correction.”

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