Market players feel rally may extend on positive global cues.
The Bombay Stock Exchange Sensitive Index, or Sensex, is back to five digits once again, courtesy near-zero inflation numbers and better-than-expected US economic indicators. The benchmark index closed over 10,000 points today, after 51 trading sessions.
Most market analysts felt the rally would extend gains as long as global cues remained positive.
The Sensex rose 335.20, or 3.5 per cent, to 10,003.10, its highest since January, 6. The S&P CNX Nifty climbed 3.3 per cent to 3,082.25.
The rally was primarily triggered by traders, who resorted to short covering due to the expiry of futures and options today. Continued buying from foreign institutional investors (FIIs) also buoyed the markets.
The FIIs have been aggressively buying in the past three weeks, investing Rs 2,407 crore since March 9. Today, FIIs were net buyers of Rs 1,291 crore and domestic institutional players sold Rs 461.87 crore, according to provisional data from BSE.
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Yesterday, US’ February new home sales numbers showed a rise by 4.7 per cent, against expectations of a 2.9 per cent decline. Even consumer durable goods' orders grew 3.4 per cent. As a result, the Dow Jones Industrial Average ended 90 points higher at 7,750. The Nasdaq Composite ended 12.5 points higher at 1,529.
Market volatility is also lower. In February, NSE’s volatility index fell from 42 to 36. It fell to a nine-month low of 28 yesterday, reflecting that uncertainty levels are down. But traders feel the ideal level would be around 25 and a figure lower than that would indicate the worst is over.
Sameer Arora, Fund Manager, Helios Capital, felt the days of extreme pessimism were now over. The current rally was mainly due to the slackening pace of bad news.
Some players, however, felt the rise was not sustainable because of the uncertainties that are still adversely impacting investor sentiment. “It is difficult to be too optimistic about this rally, as uncertainties on the political front are still looming large and no big institutional players would want to take chances," said Ambrish Baliga, vice-president (equity), Karvy Stock Broking.
Tarun Sisodia, head of research at Anand Rathi Securities said, “The technical charts are now showing that the Nifty could further rally till 3,400, provided global markets show some support." The reason for the current rally, he added, is that cash lying with fund managers in coming to the market.
| Price (Rs) | % Chg* | |
| TOP SENSEX GAINERS | ||
| Tata Motors | 172.70 | 7.94 |
| Larsen & Toubro | 661.35 | 6.10 |
| Sterlite Ind | 368.10 | 5.97 |
| TCS | 557.15 | 5.94 |
| BHEL | 1570.15 | 5.85 |
| Tata Power | 781.40 | 5.57 |
| ONGC | 804.60 | 5.36 |
| Maruti Suzuki | 771.15 | 5.07 |
| Wipro | 254.60 | 5.03 |
| Tata Steel | 204.80 | 5.00 |
| SENSEX LOSERS | ||
| Ranbaxy Labs | 157.95 | -2.95 |
| DLF | 176.10 | -0.31 |
| ACC | 560.40 | -0.28 |
| * over previous close | ||
Other Asian markets also closed up today. The Nikkei-225 was up 1.84 per cent, followed by Shanghai Composite (3.06 per cent), Hang Seng (3.57 per cent) and Strait Times (3.97 per cent).
Barring the realty index, which fell 4.54 per cent, all the other sectoral indices closed in the green. The consumer durables index rose 5.42 per cent, followed by power (4.02 per cent), metals (3.97 per cent) and banks (3.38 per cent).