Sensex soars to 7,859 despite selloff blues

10% of actively traded stocks at life-time high.

A record 267 stocks or over 10 per cent of the actively traded ones hit life-time highs on Wednesday as the BSE Sensex scaled a new closing peak on the back of robust foreign fund flows which outweighed high crude oil prices that depressed global markets.

The BSE index gained 91 points and rose to a new high of 7859.53 while the S&P CNX Nifty closed at a new peak of 2403.15. Most stocks that hit a life-time high were non-A group ones.

Category-wise, 74 stocks were from the B group, 58 from the B1 group, 47 from the S group, 35 from the Z group, 27 from the T group and 13 were from the TS group. Only three Sensex stocks, ACC (Rs 461.50), Bharti Tele-Ventures (Rs 322.45) and Tata Tea (Rs 825), reached a life-time high on Wednesday.

Sector-wise, 22 non-banking financial institutions stocks hit the roof. Of the rest, 18 stocks were from the engineering sector, 16 from construction, nine each from information technology and pharmaceuticals, seven from hotels, six from media and five each from electronic equipment and the cotton textiles sector.

Over 50 per cent of actively traded stocks have hit a life-time high so far in this calendar year. The across-the-market rally saw prices of 1,301 of 2,600 stocks gaining new heights between January and August 17.

On the BSE on Wednesday, steel scrips rose on expectations that prices are likely to rise by up to 7 per cent from September on higher global prices. Tata Steel rose 1.2 per cent to Rs 414.10 and JSW Steel gained 1.2 per cent to Rs 292.40.

Software firm VisualSoft Technologies rose 3.6 per cent to Rs 160.55 after Japan's Softbank bought a 14 per cent stake in the Indian firm for about $8 million.

DCM Shriram Consolidated rose 4.6 per cent to Rs 884.50 in the wake of its board approving a 1-for-1 bonus issue and splitting each share into five. PSUs slipped on the news that disinvestment plans had been put on hold (denied by the finance minister a day later).

National Aluminium fell 0.7 per cent to Rs 170.40 and Engineers India dropped nearly 2 per cent to Rs 463.55, while Bharat Heavy Electricals Ltd slid 1.7 per cent to Rs 1,102.25.

The total investor wealth on the BSE went up by Rs 28,000 crore on Wednesday Rs 21.11 lakh crore. Unlike in the past few trading sessions, Wednesday's rise was propelled by index heavyweights and sunshine sectors. The biggest gainers in the Sensex included ONGC, Bajaj Auto, Infosys Technologies and TCS.

Though many market players are surprised at the steep rise on Wednesday, there is nothing to suggest that this is the end of the bull run.

"The latest spike once again proves that the bull phase is not yet over, despite corrections taking place from time to time," said Mahraboon Irani of Darashaw.

FIIs have continued to keep faith in equities. Yesterday, when the market remained flat, FIIs made net purchases of Rs 17 crore.

"The rising crude oil prices have not affected the overall sentiment in the market. FIIs do not seem to be considering the rise in crude prices as an immediate threat to equity market," Ankur Agarwal of IDBI Capital Market Services said.

Traders expect the market to scale new highs in the coming trading sessions. Having breached the upper resistance level (Nifty 2380), the market should gain further, a technical analyst said.