FII buying does the kick

STOCK REPORT

Key indices ended at record closing levels today due to buying by foreign institutional investors in select heavyweights, after a volatile session.

Marginal upside in heavyweight Reliance Industries and a near 5 per cent rise in Oil & Natural Gas Corp. kept indices in the black, despite weakness in most software, banking, and metal companies.

Bombay Stock Exchange Sensex ended at 13130.79, up 40 points or 0.3 per cent over Thursday's close. Intraday, the index moved almost 130 points between a lifetime high of 13147 and 13018.

National Stock Exchange Nifty closed at 3805.35, up 14 points or 0.4 per cent, after moving between a lifetime high of 3809.65 and 3771. Analysts said the market needs to consolidate for some time since Sensex has breached the crucial 13000.

"It is always better if market moves in a slow and steady manner rather than leaping to new highs. There should be intermittent corrections in order to ensure a smooth trend and keep valuations in check," a strategist said. He, however, pointed that with economic fundamentals well in place there was no reason for the rally to cease.

Analysts also noted that since June foreign fund inflows to Indian equities have steadily regained momentum, taking the aggregate investment so far since June to $4.5 bln.

They, however, advise against getting wooed by the figures, as such funds have been notorious in the past, causing heavy losses through sudden exits.

Gains in Reliance Energy, which emerged top Nifty performer today with over 7 per cent rise, were attributed to a technical breakout. Analysts said the share could see further upside of about 10 per cent, but gains are likely to be spread over a couple of weeks.

ONGC, the other biggest gainer on the index today, rallied following the company's contract with an Abu Dhabi-based company, which is likely to increase ONGC's gas supply by 2 mln metric standard cu meters per day by Nov 2008.

Among the laggards were HCL Technologies, Oriental Bank of Commerce, Hindalco Industries, and HDFC Bank, with nearly 2 per cent losses.