Sensex touches 13-month high

Good corporate earnings and the positive mood in international markets continued to improve market sentiments, with the Sensitive Index, or Sensex, hitting a 13-month high.

The rise was in line with other Asian markets like the Shanghai Composite, Jakarta Composite and FTSE Bursa Malaysia that have hit their 52-week high in the last few days.

The Sensex rose 282.35, or 1.8 per cent, to 15,670.31, its highest close since June 17, 2008.

Overall, the benchmark has climbed 8.1 per cent this month as the results of 23 of the 30 companies on the index beat analysts’ expectations.

“Foreign ownership of India’s top 100 companies are at a five-year low and it has to go up. Our June 2010 Sensex target is 17, 000 on a base case basis,” said Ridham Desai, managing director and co-head equities at Morgan Stanley.

The mood in the US continued to be good. The S&P was up 2.1 per cent, the highest in nine-months. The Dow Jones Industrial Average advanced 1.9 per cent.

Good home sales numbers and the Labour Department’s weekly jobless data bolstered expectations that there were fewer job losses. The total number of people collecting unemployment insurance decreased for a third week.

“While the mood among large FIIs is quite good, the speed of the rise is a cause of concern and makes me nervous,” said Samir Arora, fund manager, Helios Capital.

Market experts said markets could see some decline by the end of the year before a rebound.

As Nilesh Jasani and Arya Sen said in a Credit Suisse Group AG note, “The Sensex may rise to 17,000 by the middle of 2010, aided by availability of capital. But there could be a decline of 15-20 per cent by the end of 2009 before the rebound.”