Sensex soars 77 points on fresh FII buys

Fresh purchases by foreign funds pushed up the domestic stock market to their highest close in two weeks on Tuesday, but doubts about the US economy minimised gains.

Extending its gains from Monday, the benchmark Sensex rose 76.81 points, or 0.52 per cent, to 14,919.19. The broader S&P CNX Nifty, which tracks 50 stocks, gained 18.10 points, or 0.42 per cent, to 4,320.70 points.

The rise in the markets was led by index heavyweight Reliance Industries (up 2.58 per cent to Rs 1,880.05) and IT stocks. Satyam Computers (up 2.48 per cent to Rs 449.70) and Infosys Technologies (up 1.83 per cent to Rs 1,882.50).

Outperforming the Sensex was the BSE small-cap Index, which was up by 1.07 per cent, or 82.92 points, to 7,808.44. The BSE mid-cap gained 0.77 per cent, or 48.98 points to close at 6,409.64.

The index, which has risen 6.65 per cent from a three-month closing low last Tuesday, is still 6 per cent below the record of 15,868.85 set on July 24.

The foreign institutional investors (FIIs) continue to remain net buyers on Tuesday. Their net purchases were to the tune of Rs 390.20 crore, against yesterday's net buying of Rs 695.35 crore.

After a long time, Indian institutions booked profit on Tuesday as they were net sellers to the tune of Rs. 79.32 crore.

The US stocks opened lower on open Tuesday as credit crunch fears continue to cause problems for the Wall Street. Dow traded 50 points low on opening. The broader S&P 500 and the tech-fuelled Nasdaq all declined slightly after the opening bell.

Reliance Industries alone pulled up the Sensex by 52 points. Top gainers among the Sensex stocks were Hindalco up 3.30 per cent at Rs. 153.30, followed by HDFC Bank up 2.73 per cent at Rs.1,152.

Ajay Padval, portfolio manager, K R C, pointed out that even though markets are advancing for the past few days, there would not be a major rally and the markets would be range bound until the political turmoil ends completely.

Market experts believe that some of the FIIs are waiting to invest when the time is right and market uncertainty is the least.

The market breadth looked positive as 1,566 or 58 per cent stocks advanced against the declines of 1,061 or 39.30 per cent stocks. On the F&O front analysts expect a decent if not a high rollover of the September series and point out short covering of positions in Nifty since last week.

Meanwhile, other Asian indices witnessed a subdued trend while the European markets traded on a weak note following declines in the US stocks on Monday.