Sensex kisses 14K

Analysts expect index to cross 15,000 before Budget.

The Bombay Stock Exchange's 30-share Sensex crossed the 14,000-mark today, posting gains for the third consecutive day. The index finally ended at 13,937.65 points, up 63.42 points from yesterday's close.

With the index completing the last 1,000-point journey in just 26 days, analysts now expect the Sensex to touch the 15,000-point mark before the Union Budget for 2007-08, though they expect the market to witness a brief correction in days to come.

The 15K zone was in sight as the market was flying high on a better-than-expected rise in the country's economic growth rate in the last quarter, persistent and stable inflows from foreign institutional investors (FIIs), and robust growth in earnings by India Inc, an analyst said.

"Minor hiccups cannot be ruled out, but we are pretty sure that the Sensex will be in 15K territory around February 2007. In August, when the Sensex crossed 11,500 level, a forecast was made that its touching 15K around the time of the Union Budget was possible," said Uday Joshi, technical analyst with SSKI India.

The opening of the markets today witnessed freak trade in index heavyweight Reliance Industries counter, at Rs 90 higher than the previous close, pushing the index up by 154 points to 14,028.

The broader Nifty index was up 14.75 points to 4,015.75. Among the top five gainers of the day were Tata Steel (up 5.30 per cent to Rs 492.90), Reliance Communications (up 3.43 per cent to Rs 458.05), L&T (up 2.83 per cent to Rs 1,462.25) and Reliance Industries (up 1.58 per cent to Rs 1,280).

"Given the growth prospects, excellent returns on investment, and slowing down of other global economies, India is becoming a 'must investment destination.' Strengthening of the rupee, proposed move towards fuller capital account convertability by 2009, and strong FII confidence in the economy means the India growth story is likely to continue," said Amitabh Chakraborty, head of research, BRICS PCG.

The second-quarter growth figure of 9.2 per cent released last week surpassed expectations. The government, aiming to speed up the trailing pace of 1.7 per cent growth in the agriculture sector, is looking at 10 per cent growth in the next decade.

Continued inflows from foreign investors took the total investments made by them in the country's equity markets to a whopping $50 billion last month, even as the number of FIIs registered in the country rose to 993.

Analysts expect the market to observe a correction of 500-600 points in near terms. However, they are confident that the restricted correction will not be a meltdown.

"We feel there could be some correction at the 14,200 level. But, at these levels, a fall of 500 points is no cause for concern. We hope that this will trigger the future course of action and might see the Sensex in 15K territory even before the Union Budget," said Joshi.