Sensex settles at 6,000, finally

Institutional investors ramp up volumes; m-cap up 53% in 6 months.

The Bombay Stock Exchange's (BSE's) Sensex scaled the 6,000 mark today, helped by institutional buying. Opening above the 6,000 level, the Sensex hit a high of 6,036.70 points before closing at 6,016.58 points, 0.33 per cent (19.88 points) higher than Tuesday's close and its highest close since 6,027.02 on February 18.

As a result, the combined investor wealth now stands at Rs 14,69,631 crore, up 53.25 per cent from Rs 9,58,960 crore on May 17, when the Sensex fell to its lowest level this year.

But the Indian equity market still ranks fifth among its peers in the Asian region. A survey of returns from benchmark indices in the Asian region shows that the Indonesian Jakarta Composite posted a stunning 26.62 per cent gain between April 1 and November 17, while the Sensex managed to post returns of 4.8 per cent.

Bank and automobile company scrips were among the biggest gainers today. Pharmaceutical and fast moving consumer goods company scrips were among the biggest losers. Of the 30 scrips in the Sensex basket, 16 closed with losses, reflecting nervousness at higher levels. The breadth of the market was far more positive, with gainers outpacing losers 2:1.

Among the 11 sectoral indices on the BSE, the index of bank stocks, the Bankex, was the biggest gainer, closing 3.39 per cent higher, followed by the auto index, which was up 1.13 per cent, and the PSU index with gains of 1.12 per cent.

Only three indices ended the day with losses over the previous close: the BSE healthcare index fell 0.64 per cent, the FMCG index was down 0.57 per cent and the BSE capital goods index was down 0.12 per cent.

Analysts said buying in banking scrips was fuelled by hopes of improved bank profitability following the rise in interest rates. Automobile company and public sector undertaking scrips attracted renewed buying attention after their recent price falls.

Brokers said the market was rangebound today, with some selling emerging at higher levels.

The index rose in the afternoon session on buying by institutions, mostly foreign. In fact, marketmen said the strong foreign fund flows had fuelled this rally, which is mostly liquidity driven.

"This could also be the reason to expect a further upside as the inflows are likely to continue," said the research head of a domestic brokerage.

Easing international oil prices also helped the sentiment, but at the current level of the Sensex one could expect some volatility, he added.

Rohit Srivastava, market strategist at Sharekhan, the online broker, said: "The market looks positive because it has closed above 5,979, the previous high in April. Subseqently, it tumbled to a low of 4,505. Technically, having cleared this hurdle, the Sensex may test its previous high of 6,249, hit in mid-January".

ICICI Bank was the biggest gainer in the Sensex basket, rising 4.80 per cent to close at Rs 334.95, followed by Hero Honda Motors, up 2.51 per cent to Rs 451.85. Hindustan Petroleum Corporation gained 1.93 per cent to Rs 361.45, Zee Telefilms was up 1.91 per cent to Rs 155 and the State Bank of India scrip gained 1.68 per cent to Rs 513.30.

Cipla was the biggest loser in the Sensex basket, falling 2.28 per cent to close at Rs 271.70, followed by Ranbaxy Labs, down 2.27 per cent to Rs 1049.20. Larsen & Toubro fell 1.33 per cent to Rs 846.45, ITC was down 1.11 per cent to Rs 1,135.55 and Grasim fell 1.07 per cent to Rs 1,114.60.

Volumes were higher in the cash segment today than on Tuesday; the BSE reported a turnover of Rs 1,780.76 crore while the National Stock Exchange reported a turnover of Rs 4063.31 crore.

Foreign institutional investors (FII) were net buyers of Indian shares worth Rs 357.40 crore on Tuesday while domestic mutual funds were net sellers to the tune of Rs 41.60 crore.