By Indulal PM
MUMBAI (Reuters) - The BSE Sensex edged up on Thursday as blue chips from Infosys to BHEL extended a rally on continued strong buying by foreign investors, although volumes were thin in a holiday-shortened week.
Foreign institutional investors (FIIs) have been net buyers in almost every session so far this month, bringing their net purchases to around $2.4 billion in December and of nearly $20 billion for the calendar year.
The gains came even after the Federal Reserve last week announced the start of a gradual scaledown in bond purchases.
Still, analysts warned that continued concerns about the domestic economy, which is stuck in what some analysts call a stagflationary environment of low growth but high inflation, could cap broader gains.
"We expect markets to trade range-bound in the short- to medium-term. Investors need to take a balanced approach as on one hand, we have concerns over inflation and growth but improving (current) account deficit numbers and expectation of further policy reforms are positive," said Dipen Shah, head of private client group research at Kotak Securities.
"We advise clients to be selective and get into good defensive stocks in the consumer or technology sector."
The Sensex closed up 0.2 percent at 21,074.59, while the Nifty ended higher 0.17 percent at 6,278.90.
Blue chips were among the leading gainers, with Infosys
Some laggards earlier in the year are also ending 2013 strongly. Bharat Heavy Electricals
Meanwhile, state-run oil marketing companies gained after media reports, including newspaper Business Standard, said the petroleum and natural gas ministry was planning to propose a hike of 5 rupees in diesel prices.
Shares of Indian Oil Corp
Axis Bank
Shares in Adani Power
(Reporting by Indulal PM; Editing by Subhranshu Sahu)
