Rally unlimited on Dalal Street

Sensex spurts 284 points on fund buying.

The markets continued to surge today on the back of robust fund inflows and expectations of strong company results in the fourth quarter. The Sensex zoomed 284.4 points (2.52 per cent) to end at 11,564.4, recording the biggest single-day rise in the past two years.

It was also the fastest 500-point rally "" in just five trading sessions. So far this year, foreign institutional investors and domestic mutual funds have made net purchases in excess of Rs 20,426 crore.

Technology, capital goods and automobile stocks were the leaders in today's bull run. The major sectoral indices that gained include BSE IT (up 3.59 per cent to 4,175.12), BSE Teck (up 3.27 per cent to 2,801.78), BSE Small-Cap (up 3.23 per cent to 6,804.6), BSE Capital Goods (up 2.86 per cent to 8,404.11), BSE Auto (up 2.79 per cent to 5,471.24) and BSE Oil & Gas (up 2.59 per cent to 5,046.18).

The market breadth was overwhelmingly positive. Of the 2,580 stocks traded on the Bombay Stock Exchange, 2,185 advanced, 350 declined and 45 stocks remained unchanged. The combined turnover on the two bourses, including the derivatives segment, was upwards of Rs 42,000 crore, hitting an all-time high again.

The Sensex has risen from 9,300-levels, recording a 23 per cent jump since the start of this year.

"There are expectations of similar returns in this quarter too. Given that corporate earnings are likely to be strong and positive sentiment prevails, the quarterly allocations of FIIs are likely to be higher for India," HDFC Securities Head (Retail Research) Deepak Jasani said. But he added that the money coming in could be short-term funds.

Analysts feel that the build-up in the market is ahead of the March quarter results, which are expected to be good, especially in the information technology sector.

Moreover, the sales numbers of companies in sectors like cement and automobiles have been good for the past month. The outlook has also been bullish for the capital goods sector.

Merchant bankers and analysts, who attended the presentation of Reliance Petroleum in Jamnagar yesterday, came back impressed.

The Reliance Industries stock was a prominent gainer today, rising 4.14 per cent to reach Rs 829.25. Other major frontline stocks that gained today were Siemens (up 6.85 per cent), Infosys (up 5.45 per cent), Maruti (up 4.27 per cent), Grasim (up 4.23 per cent), Tata Motors (up 4.22 per cent), Satyam Computers (up 3.9 per cent), Raymond (up 5.2 per cent) and JSW Steel (up 4.97 per cent).

Among the other major stocks which gained were: Gujarat Ambuja Cements (up 3 per cent), Bharat Heavy Electricals (up 2.3 per cent), Whirlpool (up 12.2 per cent), Shasun Chemicals (up 5.7 per cent) and Uttam Galva Steels (up 6 per cent).

Market participants said this had been the seventh consecutive day of rise in the Sensex. Generally, a small correction is observed 7-8 days after an upward march. Dealers feel that the rally is expected to continue till the beginning of the results season.

After that, they say, the exact direction of the market will be decided by the results and the guidance from companies.